Swedish automaker wants half of its sales to come from electric cars by 2025
Volvo has set a goal: to electrify every car in its fleet by 2030 without discussion or advances. Furthermore, by 2025, it wants 50% of its sales to come from electric cars. A point to take into account is that this is not a national decision but a global one.
According to the CMO, Rafael Ugo, about 20% of the pollution caused by the emission of land transport and electrification is a way to have a more sustainable environment. The car was born as a symbol of freedom and ended up becoming a villain, says the CMO.
Volvo has a goal of reaching 100% of the electric fleet by 2030. Why
And how did you make the decision to remove combustion cars from your portfolio?
This is not our decision in Brazil. global. We made that decision about two or three years ago for several reasons. From a philosophical point of view, Volvo recognized that the industry has somehow developed very quickly. The car has always been a dream for people and for various reasons these industries have accelerated versus environmental social development and in the last ten years the car has turned out to be a villain. Today, about 20% of pollution is caused by land transport emissions.
People’s relationship with cars has changed over the years, especially in terms of sustainability. How do you see this change?
The car was born as a symbol of freedom and ended up becoming a villain. And then, two years ago, Volvo understood that it was part of the problem, even though it was a brand that was born with a series of social credentials, and now wants to be part of the solution, in a safe and sustainable way. When we look at the sustainable part, there is a lot about electrification and it comes as part of the brand’s purpose of understanding that it wants to be part of the solution. At the least philosophical point, until about ten years ago, Volvo was a brand, at least here in Brazil, low profile, very traditional, with attributes that are not sexy and even grimaces. Electrification also comes as a way to build differentiation. So, from a brand and differentiation point of view, this was the investment. Today a brand that differentiates itself via electrification. Finally, we needed to do something practically, so there is a clear decision and the factories are transforming for that. In 2025, we will sell 50% of our volume with the electrical system and, in 2030, 100%.
How does Volvo view the younger public’s relationship with cars?
People have the perception that the industry is going to end because young people don’t care so much about cars, but they don’t. Electrification has a nice appeal with the younger audience, because they recognize in the car all the correction part of this villain. So, now the car can be more responsible from a social and environmental point of view, in addition to having a better drivability and can even give the driver some exemptions such as not having a carvery and IPVA. So, the young man begins to look at the car through a different point of view, and that is fundamental.
Older generations are used to combustion cars. How does Volvo intend to continue communicating with this part of the population?
In this case, Volvo needs to do some work to educate, in a functional way, and explain that the electric car is better. He can give you a better social vis. When you see people in their 40s and 50s buying an electric car, an audience that is already starting to look at this car as a form of status with
the perception that he is rejuvenating. Obviously, you have a need for education. Our biggest challenge is getting this person to drive an electric car.
What will be the role of the company’s communication to reach the goal? What are the actions you are thinking about?
Communication and advertising in general are very much about storytelling and big productions. It’s the way people are going to differentiate themselves in the context of communication, because I need the person to feel what electrification is. An example of this is the Volvo Lover, which we made in 2021 and made it possible for people to drive the car. As Brazil’s infrastructure is poor, Volvo decided that it would invest in the charger infrastructure itself. People can say that this is not communication, but, for me, the biggest communication channel we built was, precisely, the charger infrastructure, because we broke a barrier, even psychological, of a person charging a car at the same time we are in several points with the stamped brand. That of us doing more than talking very important.
How is brand communication organized, which advertising agencies serve Volvo in Brazil, and in the world? global alignment?
We have three major agencies. One is Grey, which does all kinds of digital and social advertising. We also have two local agencies. Casulo, which takes care of activation, event, demonstration, experiences. This, by the way, is a form of differentiation that we find, because in Brazil, unfortunately, only 2% of the population is able to buy a premium car, so offline still makes a lot of sense from the point of view of experimentation and demonstration, because a lean and extremely exclusive audience, which demands totally different deliveries. We also have InsideOut, which looks at influencers for us and everything that PR, brand content, content that is not just from the automotive industry.
What are Volvo’s main recent campaigns?
From a product point of view, the industry is very similar. Volvo also has an eye on building differentiation through new programs, values and ideas. We recently announced a six-month paternity leave at Volvo and ran a global campaign about it, which we then adapted for Brazil. The new hybrid car campaigns are also really cool and, in Brazil, we did an action last year called Batatas, produced and recorded right here in the country.
Volvo has a very specific audience when it comes to purchasing power. Does the company have plans to expand its customer portfolio to people from lower classes?
Currently, our factories are prepared to produce one million and two hundred thousand cars. Last year we sold around 700,000. Globally, we have 500,000 cars of opportunity. We work today in mid to large SUV levels. It has a track of a smaller SUV, which is where the volume comes from. So, let’s bring something that has, from a price point of view, something different from what we work with today. We must present this car in the
I eat next year.
What are the expectations for the use of the electric car in Brazil? How long do you think he will have a higher percentage in the country?
I think it won’t be as long as thought. We opened growth this year versus last year and it was abrupt. For us, there is no discussion. Today we sell 8,000 cars a year in Brazil. In 2030, I imagine selling those same 8 thousand. I think that new brands will come to the Brazilian market and this is fundamental, because brands that work with electrification in another price range must come and this is important for massification and dissemination. In addition, charger infrastructure growth has quintupled in the last two years. The infrastructure will arrive and other brands will come and I think that from the moment people become more interested in electric cars, word of mouth and communication will be very strong. a path of no return. In Brazil’s premium industry, almost 50% of sales are already hybrid or 100% electric. The whole world is moving and, as a result, technology will become more accessible and cars will evolve in terms of autonomy and cost.
The fossil fuel industry is very strong on the market. How do electric cars impact the sector?
There is pressure from the fossil industry, however, more than their pressure, there is social pressure for change. This is not a forced demand. I’m not the one trying to impose the electric car. the future. Social behavior is demanding products that are more responsible. This is everyone’s demand. The more we manage to educate and bring this meaning to new technologies, the population will adapt to it. There is a demand for the transformation of the automotive industry so that it is no longer recognized as a villain, but as the good guy in the story.
Speaking of sustainability, how sustainable are electric cars compared to combustion-powered ones?
Today, the car has a useful life of about ten years. If you take the car as its entire chain of development, from the extraction of cobalt to its trading, the electric car until it starts walking on the streets is no different from the combustion car. Until last year, I would even say that it was more harmful than the combustion ones, in terms of carbon footprint. As there is still no scale for battery development, raw material extraction and a number of other things, the entire production and logistics chain for electric cars was less sustainable than a combustion car. But from the moment the car starts to walk on the street, it does not emit carbon dioxide and compensates for this gap. Furthermore, by 2040, Volvo wants to be carbon neutral in its entire ecosystem.
How important is car design to the consumer?
Design is something we don’t talk about. People show. And in Brazil the car has a different connotation, reference and meaning. Here, the car tells a lot about who you are, and the design tells a lot about that too.
