The electric car has disrupted the automotive market. Initially, only with sub-compact cars, with very limited range, and requiring a long time to charge. Hybrid cars, powered by both an electric motor and an internal combustion engine were more successful, especially since they didn’t need to be charged and could rely on gasoline when the batteries were running low.
At the same time, a startup company, Tesla, became a market disruptor by building a company purely on electric motors. Tesla offers nothing but electric cars, and all of them at the premium category.
But, as Clayton Christensen described in The Innovator’s Dilemma, established players have a very hard time letting go of the prior investments in the older technology.
Until this week, that it.
“People increasingly demand electrified cars and we want to respond to our customers’ current and future needs. You can now pick and choose whichever electrified Volvo you wish,” said Volvo’s President and CEO Håkan Samuelsson. “We are convinced that the future of Volvo is electric, and that’s why we stated the bold commitment to bring out one million twin-engine cars or all-electric cars until 2025,” he added in an interview.
Henrik Green, Volvo’s senior vice president of research and development said that “the time for electrification has finally come. The technology is ripe, the price is right, and the customers are ready.”
While all new Volvo cars will include an electric motor, only some of them will be pure electric. Some will be plug-in hybrid, and the rest will be mild hybrid cars.
Volvo plans to launch five fully electric car models between 2019 and 2021. Three of those would be the classic Volvo models, and the other two would be high performance electric cars under the Polestar performance brand name.
Undoubtedly, this is a rare example of a very established and mature company (founded 90 years ago, in 1927) that completely reinvents itself, and in such a short time frame.