I moved this to the front page since it was only up for an hour until Spyker’s press releases started to fly out, including the announcement of JAJ’s retirement. It deserves some time on the front page. -Jeff
This isn’t about Saab, per se. I guess you could say it’s more of a perspective piece on the industry as a whole. As I’m about to dip my toes into this industry, I’ve found it interesting to take a wider perspective and try to understand a little more of the ‘why’ – from the company’s point of view.
This article about the Volvo C30 Electric was on Autoblog earlier today:
A trial fleet of around 400 Volvo C30 Electrics is coming, and anyone who wants one had better have an awful big piggy bank. Speaking at a media launch near Indianapolis, IN today, the president of Volvo Car Special Vehicles, Lennart Stegland, said that, while the final price for the car hasn’t been set, Volvo will not sell the EV, but instead offer the car through a three-year lease for around 1,500 Euros. Per month.
I can’t imagine the digital decibels that would reverberate through comments if this were VolvosUnited. I can picture it now – we’d all be pleased as punch in the lead up to the vehicle’s introduction and then Volvo’s PR group would drop the pricing hammer and we’d go nuts.
And I can understand why, too. That’s a bucketload of money for any car, let alone a small 4-seater with a ill-shaped hatch opening.
That figure – which translates into around US$2,200 per month, by the way – is what first got my attention. Reading further into the article got me feeling a little bit sorry for our much larger Swedish compatriots.
…..so if you stick it out for the full 36 months, you get to spend $76,674 to not buy a car. Even worse, Stegland said that Volvo will lose money on the deal. Ouch. Developing electric vehicles for mass production is more than mildly expensive.
Isn’t that just a little bit amazing?
The company does the work, brings that work to market. They have to charge megabucks just to scrape back some of the cost and despite bringing such an innovative vehicle to market, they’ll still have to take the negative publicity that goes with such a high price as well as taking a loss on the vehicles.
Electrification, despite its prominence at recent motor shows, is still a niche when it comes to actual products for market. Toyota have been the most successful with partial electrification, selling Prius hybrids for over a decade now. Despite the age of their hybrid technology and there dominant market share in the sector, the most recent information I could find suggests that
they’re still making a loss on each one the Prius lost around $10K per car and has only recently started to make real money per unit sold (corrected with a more recent source).
In other words, we’ve really only got widespread availability of hybrid Toyotas because the company was massive enough and profitable enough to absorb the cost of producing them for an entire decade or so.
If a huge, advanced and undeniably successful company like Toyota has had to rely on other models to fund the Prius program (now profitable and spread amongst other models as well), then consider the challenge a much smaller Volvo has just undertaken in order to bring this C30 Electric to market.
More than that, consider the technologies that Saab are about to build into their range of vehicles and the difficulties such a scenario presents for the smaller Swede. Yes, Saab have incredible talent in their engineering department and yes, they can be nimble and take decisions quickly to develop products and to negotiate with the right partners. But it’s still an incredibly complex and difficult exercise.
Good luck to Volvo. And long live Saab!