Volvo's New Plug-In Hybrid Is a Game-Changer

Last year, Geely Automobile Holdings' Volvo launched its first-ever V60 diesel plug-in hybrid, and this year, its popularity has skyrocketed. So far, it's sold out across Europe, was one of three finalists for the 2013 Green Car of the Year award, and was Volvo's most popular new car launch, ever. What's more, this success may pave the way for an American launch of a Volvo plug-in. Here's what else you need to know.

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Source: Wikimedia Commons. 

The V60 Plug-In Hybrid
In 2010, Ford (NYSE: F  ) sold Volvo to Geely, and things didn't look promising for Volvo -- especially after the 2011 reveal of the Universal Concept. But after the successful launch of the V60 Plug-In Hybrid, or PHEV, that outlook may be changing.

Starting at $74,000 -- before U.K. incentives -- the V60 PHEV can go 31 miles per electric charge, before switching to a 212 HP, 2.4 turbodiesel engine, with 324 pound-feet of torque. Weighing just over 4,400 pounds, the V60 PHEV can go from 0 to 60 in 5.8 seconds, has a top speed of 143 mph while running on gas, and can hit 78 mph when running on all-electric.  

The battery that powers the V60 PHEV is an 11.2 kWh lithium-ion battery, but it uses only 8 kWh. Further, Volvo states that under Europe's New European Driving Cycle, the official fuel economy figure is 155.2 mpg. The car also has AWD, a five-star crash rating, a full SE Lux specification, and the ability to drive in three different modes: Pure (all electric), Hybrid, and, Power (all diesel). And it can seat five and with plenty of room left for storage. 

Sales are sky-high
The initial V60 PHEV launch was for 1,000 cars, and they sold out before hitting the showroom. Then the V60 PHEV qualified for the U.K. plug-in grant, which brought the price to around $65,000. That caused Volvo to raise production to 4,000-6,000 for 2013. But sales have been so strong that Volvo said it might raise production to 10,000.

Volvo had been slow to release a "green car," citing lack of demand, and the V60 isn't available in the United States. However, the success of the V60 PHEV may be enough to change Volvo's mind. And even if Volvo doesn't bring this car to America, there are a number of concept models, such as the XC60 PHEV SUV, that Volvo sees as marketable in the U.S. and China. Considering the U.S. and China are the two biggest names when it comes to automotive sales, a hot-selling PHEV would be great for Volvo. 

Volvo's future
Volvo has already shown that its V60 PHEV is a powerful force in the sales department, so if the company decides to release it in the U.S., or introduce a different PHEV, it will be something to watch.

Electric vehicles have been slowly gaining in popularity -- whether it's a PHEV, a BEV, or any other variation. But sales for EVs are still low and make up only a limited market share. Consequently, any new EV release will probably affect other EV sales. Here's an example: At the beginning of 2012, there were really only three comparable EVs available -- General Motors' (NYSE: GM  ) Chevy Volt, Toyota's (NYSE: TM  ) Prius Plug-In Hybrid, and Nissan's (NASDAQOTH: NSANY  ) Leaf.



Source: Inside EVs' Monthly Plug-In Sales Scorecard, 

Overall, the Prius Plug-In sold relatively well -- in fact, it was the second best-selling plug-in. But in May, Ford saw its first sales of the Focus Electric, and that was followed by more EV releases. By 2013 there were a number of EVs available -- and Toyota saw a steady decline in sales.



Source: Inside EVs' Monthly Plug-In Sales Scorecard, 

As 2013 has progressed, more EVs -- such as the Chevy Spark -- have become available, and the Volt and Leaf have struggled, while sales of other EVs have climbed. Thanks to the limited market, having more EVs come to market dilutes other EV sales.

The V60 PHEV is a luxury hybrid, and it's already competing with Tesla Motors' (NASDAQ: TSLA  ) Model S for European sales -- the 40 kWh isn't available outside the U.S, and the 60 kWh Model S starts around $91,000 outside the United States. If the V60 PHEV comes to America, it'll compete with Tesla in the luxury EV market. And if Volvo decides to release XC60 PHEV SUV, it could compete with Tesla's Model X.

What to watch
Right now, sales for the V60 PHEV are incredibly strong and seem to be getting stronger. That makes it a game-changer for Volvo. However, Volvo's production of the V60 PHEV is limited, and it's a diesel, so It may not make it to the U.S anytime soon -- although there are rumors to the contrary. If the V60 PHEV does come to the U.S., this is a vehicle to watch -- not only for what it can do for Volvo's profits, but also for how it could affect other EVs', and in particular Tesla's, sales.

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Read/Post Comments (7) | Recommend This Article (10)

Comments from our Foolish Readers

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  • Report this Comment On August 31, 2013, at 9:54 AM, FlyMmo wrote:

    It's very nice indeed.

    Volvo makes fine automobiles, but not a competitor for a Model S.

    And this diesel-electro solution is not a bad one, but not a clever combination. And a very complex one.

    There is nothing matching the simplicity of an electric motor and a battery...

  • Report this Comment On August 31, 2013, at 9:56 AM, normgarry wrote:

    #1 Electric Vehicles and Diesels carry premium prices that the cash-strapped American market, still digging out of the credit crisis is NOT willing to pay.

    Diesel fuel is more expensive than Super Premium unleaded in most parts of the country and EV's without gasoline backups tend to be far more expensive than their gasoline counterparts.

    The cost and difficulty of financing these differences is the reason sales are so small. Some people's credit won't allow it. Some people see no reason to bother affording it and Many people aren't happy with the restrictions imposed by plug-ins or diesels.

    #2 THIS IS THE GOVERNMENT'S FAULT. These ridiculous CAFE regs are the reason the new cars are underpowered, gutless 4-cylinder engines strapped to 4000 pound cars - which will undoubtedly get poor reviews. Then, without admitting fault, the government tries to subsidize the cars with all types of tax breaks, incentives and HOV lanes/ special parking permissions.

    #3 Plug-in/Diesel would make more sense for the Luxobarges like the S-class, BMW7 and Audi A8 (among others). Cars that large already weigh in excess of 4500 pounds. Electric Motors provide enough instant torque to move them, Electric Motors are as quiet as luxury buyers demand a car to be and since these cars already cost $90,000-plus, the Rich/wealthy won't be phased by spending on Diesel or the support equipment for the plug-in feature.

  • Report this Comment On August 31, 2013, at 9:56 AM, normgarry wrote:

    "Starting at $74,000"

    LOL - yeah that sounds like it would be PERFECT for Main Street.

  • Report this Comment On August 31, 2013, at 10:52 AM, flyingdals wrote:

    $74k is out of too many people's price range. I recently bought a Focus Electric for $34,700 then I can take $7,500 for the tax break and Ford gave me 0% for 60 months. I use it locally (most my driving is locally) - have other cars to go out-of-town and it has a very nice ride. I can fit four adults relatively comfortably which I cannot do with the other cars (coupes with minimal if any backseat - Mustang, Camaro, MR2). People who drive it are impressed. It is not for everyone, but for me if fits my needs well. The area i live in has a population of approximately 230,000, not too large, no need for range anxiety. I don't think it would fly well in areas with long traffic jams, and bumper to bumper traffic. Air conditioning/heating hurts the range as does driving highway speeds. The EPA lists it at 76 mile range, i get 80-90, but I believe if it was used strictly for highway the range would be more like 60 miles. In addition I did not pay $2,000-$3,000 for a 240 charger, I use the 110 that comes with the car and it does fine for my needs. Contrary to many comments I have read - it is not a glorified golf cart, and a long-time Prius driver told me the ride is much better (accelerating, braking, handling, etc) than his Prius.

  • Report this Comment On August 31, 2013, at 6:10 PM, weaponz wrote:

    This is not going to be anywhere close to competing with a Tesla Model S. No one in the market of a Tesla is going to buy this volvo. This volvo will compete with the Cadillac version of the volt. With a Tesla? no way.

    Also, the EV sales chart is reporting inaccurate information about the Tesla sales. (not surprising since Tesla only reports quarterly numbers)

  • Report this Comment On August 31, 2013, at 8:37 PM, SteveTG3 wrote:

    this is an interesting product and would have had a place if the model S was a decade away. (fwiw, for a few months in early 2012 I read reports about this car and it was at the top of my wish list until I started to learn about Tesla).

    unfortunately for Volvo the model S is here now, and it makes this plug-in hybrid look like a "typewriter/inkjet printer hybrid" compared to a laser printer.

  • Report this Comment On September 01, 2013, at 7:39 AM, thegreentreefrog wrote:

    Power it with CNG Compressed Natural Gas and you have got something!

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