Volvo Cars Transition to the Age of Electric Vehicles

Volvo Cars Electrification 1
Volvo Cars Transition to the Age of Electric Vehicles
By (Name)
Course
Professor’s Name
Location of Institution
Date

Volvo Cars Electrification 2
Contents
Introduction................................................................................................................................4
Part 1: External Forces...............................................................................................................4
PESTEL Analysis....................................................................................................................4
Political Factors..................................................................................................................4
Economic factors................................................................................................................5
Social factors.......................................................................................................................5
Technological Factors.........................................................................................................5
Legal factors.......................................................................................................................5
Environmental factors.........................................................................................................5
Porter’s 5 Forces....................................................................................................................6
Organizational Changes.........................................................................................................6
Reason for Organisational Changes......................................................................................8
Conclusion..............................................................................................................................8
Part 2: New Opportunities..........................................................................................................9
Porter’s Value Chain..............................................................................................................9
Business Opportunities.........................................................................................................10
Raw materials Supply.......................................................................................................10
Infrastructure for charging................................................................................................10
Customer support services................................................................................................11
Business discontinuation......................................................................................................11
Internal Combustion Engines supply................................................................................11
Oil supply and fuel stations..............................................................................................11
Vehicle Maintenance and Repair Businesses...................................................................12
Conclusion............................................................................................................................12
References................................................................................................................................13

Volvo Cars Electrification 3
Introduction
The shift of vehicle manufacturers to the age of electrification is rapid as electric
vehicles gain popularity from customers and approval from most governments. The main
driving force behind this transition is the need to minimize environmental emissions. The
European Union has set regulations to limit the rate of greenhouse emissions to 30% by the
year 2020. Electric vehicles range from hybrid vehicles (HEVs) to fuel cell electric vehicles
(FCEVs). These are entirely electric-powered vehicles with a recharging system. Volvo Cars
are also taking the electrification step, as it unveiled its first brand in its electric vehicle
portfolio, the XC40 Recharge, in 2019.
The move to transform from internal combustion Engine vehicles to purely electric-
powered is determined by many factors, including political, economic, and technological
factors. Political factors such as support by the government for research and development in
this field contribute immensely to a fast transition. This report conducts an analysis of the
external factors that affect Volvo cars electrification, and the impact this revolution will have
on the business environment.

Volvo Cars Electrification 4
Part 1: External Forces
PESTEL Analysis
Political Factors
Most European governments support the development and sale of electric vehicles.
They offer funds for research and development in this field. Electric vehicle owners are
provided free parking spaces and even tax exemptions (Masiero et al., 2016). This is an
opportunity for Volvo cars as government incentives encourage more customers to purchase
electric vehicles, thus widening the market. Other political factors include:
 Global declarations (opportunity)
 Trade policies (opportunity and threat)
Economic factors
 Increasing demand for electric vehicles (opportunity) (Yang et al., 2018).
 Decreasing the cost of batteries and charging stations (opportunity).
 The increasing cost of fossil fuel. (opportunity)
Social factors
 Rise in urban population density (opportunity).
 Increasing knowledge of environmental conservation (opportunity) (Chu et al.,
2018).
 Covid-19 pandemic (threat)
Technological Factors
 Rising innovations in battery technology (opportunity) (Miao et al., 2019).
 Innovations in information technology (opportunity and threat).
 Rise in automation technology (opportunity)