In recent months, several automakers have made some very exciting and inspiring commitments to fight climate change and improve air quality by manufacturing cars that are fueled by electricity rather than fossil fuels. One example is Volvo Car Group, which announced in July that all of its models will be either hybrids or exclusively battery powered by 2019. This is a daring move in the industry.
In announcing his company’s plan, Volvo President and CEO Håkan Samuelsson noted that customers are increasingly asking for electric cars. Although he admitted that Volvo’s new strategy involves some risks, he also asserted that “a much bigger risk would be to stick with internal combustion engines.”
Volvo was acquired by multinational automotive manufacturing company Geely in 2010, which already makes battery-powered cars for the Chinese market. With Volvo headed in the same direction, Geely stands to derive a distinct competitive advantage — particularly in China, which already is the largest market in the world for electric cars.
Meanwhile, Palo Alto, California-based Tesla announced that it has started production of its much-anticipated Model 3 electric car. The company’s goal is to produce 500,000 units by the end of 2018. To that end, Tesla leaders say they are looking to make manufacturing investments in other countries, including China. In 2016, China accounted for about 15 percent of Tesla’s revenue.
“Tesla is working with the Shanghai municipal government to explore the possibility of establishing a manufacturing facility in the region to serve the Chinese market,” a company spokesman said in a June 2017 article in The New York Times. “Tesla is deeply committed to the Chinese market, and we continue to evaluate potential manufacturing sites around the globe to serve local markets.”
Meanwhile, British luxury carmaker Aston Martin Lagonda Limited said that it will substitute battery-powered engines for internal combustion engines in all of its models by 2025. Jaguar Land Rover Limited has followed suit, announcing that all of its new cars will have an electric powertrain by 2020.
Interestingly, the migration to electric engines isn’t limited to passenger cars. Tesla leaders say the company soon will unveil its first electric semi-trailer truck. Similarly, Daimler has plans to introduce the Mitsubishi FUSO eCanter short-range electric truck in the U.S. market. These trucks can carry as much as 4.5 tons of cargo while being quieter than gas-powered equivalents and emission-free. Daimler estimates that the truck will save about $2,000 in operating costs for every 10,000 miles driven.
“We want FUSO to be the Tesla of electric trucks,” said FUSO CEO Jecka Glasman in a March 15 interview with Trucks.com. She added that increased congestion in city centers and the movement to reduce greenhouse gas emissions and noise pollution will create a market for electric trucks.
Indeed, the United Nations reports that 1.7 billion people, or 23 percent of the world’s population, live in a city with at least 1 million inhabitants — and that amount will increase to 27 percent by 2030. In that same timeframe, the number of cities with 10 million or more inhabitants will increase from 31 to 41.
“Goods will still need to be delivered,” Glasman said in the interview. “The all-electric trucks will be a good option.”
The automotive industry is providing compelling examples of the benefits for early adopters of new technologies designed to lighten our collective environmental footprint. Furthermore, investments in these innovations are creating jobs, protecting the environment, improving air quality and driving incremental sales.
Tesla’s mission is to accelerate the world’s transition to sustainable energy. With a visionary leader like Elon Musk leading the charge, others in the industry surely will follow in this effort to stop relying on fossil fuels and move to zero-emission standards.
Antonio Galvao, CSCP, CLTD, is the vice president of global logistics — building efficiencies at Johnson Controls. He may be contacted at firstname.lastname@example.org.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Johnson Controls.
Mike Dries is a retired business journalist and corporate communications executive now working as a freelance writer. He may be contacted at email@example.com.
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