Volvo's decision to join Tesla by going electric makes perfect sense

VolvoVolvo S90 T8 TwinEngine plug-in hybrid.On Wednesday, Volvo Cars announced that its entire lineup with either become electric or hybridized by 2019.

For cynics, Volvo's announcement is a mere PR stunt designed to capitalize on the propulsion method du jour. After all, Tesla, a company that sells less than 80,000 electric cars a year now boasts a market cap on par with General Motors and its 10 million in annual sales.

On the other hand, proponents of electric mobility applaud Volvo for being a mainstream automaker brave enough to take the plunge.

While I am neither cynic nor e-mobility evangelist, I think Volvo's decision to go electric makes perfect sense.

Of all of the world's mainstream automakers, Volvo's all-out assault on electric mobility is the least surprising. And it has much to do with the future as it has with the past.

For most of Volvo's 90-year history, the Swedish automaker offered its loyal legions of customers well-built, safe, and practical transportation with a certain Scandinavian flair.

VolvoVolvo hybrid drive system.It's a company that has always been willing think outside of the box when it comes to automotive tech. Even when its styling department made its money by embracing squared off edges. Over the years, Volvo pioneered everything from the three-point seat belt to radar and camera-based pedestrian detection technology.

As powertrains go, Volvo has always marched to the beat of its own drum. In the 1990s and early 2000s, the company stuck with its signature turbocharged five-cylinder engines while other luxury brands moved towards larger six, eight, and even 12 cylinder powerplants.

In 2015, as the industry looked to downsize its engines amid tightening fuel economy and emissions regulations, Volvo took that to the extreme by debuting the diminutive Drive-E family of four-cylinder engines that will power the company's entire lineup.

All of that is to say Volvo's latest proclamation falls perfectly in line with the company's modus operandi.

VolvoVolvo Drive-E engine.On a practical level, Volvo's decision to hitch its wagon to the electric revolution also makes a tremendous amount of sense. With Drive-E engines under the hood of all new Volvos, the company is far less invested in internal combustion than the vast majority of mainstream automakers.

In order to get Drive-E's small displacement engines to deliver the output necessary to power a luxury vehicle, Volvo turned to modern turbo- and supercharger technology. In fact, some Drive-E engines are both turbocharged and supercharged. However, there is a limit to the amount of extra boost Volvo can run to make more power before the engine's fuel economy and long-term reliability are compromised. That's where hybridization comes into play. Currently, Volvo uses a hybrid drive system to give its top-of-the-line XC90 T8 SUV a 100 horsepower boost and to create a virtual all-wheel-drive system by mounting an electric motor on the rear axle.

When applied across its lineup in non-all-wheel-drive applications, a hybrid drive system's electric motors deliver valuable low-end torque, which is often times missing from small displacement engines.

Business InsiderVolvo XC90, Business Insider's 2015 Car of the Year.And then there's China. As part of China's Geely Group, Volvo's presence in the Middle Kingdom has increased exponentially in recent years. In fact, China has become Volvo's single largest market. However, the country is confronting major pollution and congestion issues - especially in the megacities that dot its eastern coast. In these cities, where much of China's wealth and Volvo's customers reside, government regulations have been put in place to favor hybrid and pure electric vehicles. In places such as Shanghai, it is virtually impossible to register a new license plate for a car that doesn't have some sort of electrification.

At the end of the day, Volvo's decision to go electric is once again a reminder that the Swedish automaker is busy at work nudging the industry forward as it has for nearly a century.

This column does not necessarily reflect the opinion of Business Insider.

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