Volvo’s long-time CEO, Håkan Samuelsson, is returning to help the brand and openly admits that the rapid electrification of the auto industry will result in a few Western automotive brands going out of business.
Samuelsson led Volvo from 2012 to 2022, when he retired on top after a successful public offering.
However, Volvo’s stock has been sliding since his exit, and he recently accepted a 2-year contract to lead Volvo again as the company tries to find a permanent new leader.
He gave an interview with Bloomberg this week, in which he stated that Volvo remains firmly committed to electrification despite some pullbacks.
Samuelsson doesn’t mince his words. He understands that the EV transition is difficult on the industry and China’s forceful push toward electrification at a global scale is putting pressure on Western automakers.
He believes that the industry will be fully electric in about 10 years and that some brands won’t survive the transition:
The industry will be electric — there’s no turning back. It may take a bit longer in some regions, but the direction is clear. In (about) 10 years, cars will all be electric and they will be lower cost.
There will be new dominant players, exactly as Ford, GM, Toyota and Volkswagen were in the old world. In the new world, there will be two or three very strong Chinese brands. That makes the room for the old ones tougher. So this will trigger a (wave of) restructuring. Some companies will adapt to new circumstances and survive. Others will not.
He didn’t specify which ones he thinks will not survive, but he is hopeful Volvo will be among those that will remain.
The CEO is also encouraged by the connection with Geely, which has been making great progress in electrification and owns a majority stake in the Swedish automaker.
However, the connection is also causing Volvo some issues, as they have been threatened with a sales ban in the US due to their Chinese ownership.
Electrek’s Take
I think he is right. I’ve been saying it for years, but this is the kind of disruption that companies don’t survive.
It is a huge industry and it moves slowly, especially for some legacy automakers. When you have new startups, such as Tesla and Rivian, which are more nimble, it is genuinely disruptive.
And now that Chinese companies, with their incredible manufacturing pace, are getting involved, as seen with BYD and Xiaomi, it is putting a lot of pressure on existing players.
However, it’s still not clear which ones will and won’t survive.
I’d love to know your best guests of who you think won’t survive the EV transition in the comment section below.
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