Since Volvo Cars was sold to the Chinese conglomerate Geely in 2010, the company has been building success on top of success. Geely management wisely left the Swedes in charge, and Volvo products since that time have become more distinct, with a definitive Volvo brand identity. Alexander “Lex” Kerssemakers has been leading the brand’s charge in the Americas since 2015. The Dutch-born executive has held a series of marketing positions with the company since 1996. Digital Trends recently sat down with Kerssemakers to discuss where Volvo is going, and how it plans to get there.
Digital Trends: Volvo recently announced a commitment to electrification going forward, and that announcement has been widely misinterpreted as meaning that there would be no gasoline engines from Volvo starting in 2019. Can you clarify what the plan is and is not?
Lex Kerssemakers: We noticed that misunderstanding and we tried to correct it, because the purpose was not to mislead. What we tried to say is that from 2019, every new car we launch will have electrification. As of 2019 we will have the T8 plug-in engine as we currently have, and we will start launching fully electric cars. And by 2021 we will have five fully electric cars in our lineup, and the regular cars. I call them regular cars because every combustion engine will have an electric motor supporting fuel efficiency or performance. It’s a step-by-step approach, fully underlying our strategic direction towards electrification.
We strongly believe in electrification. And we started the journey in 2008 but we decided to focus on four-cylinder turbo engines with electrification, and at the beginning we let the electrification do the job for power gain. But at the end, electrification should take over the entire propulsion.
We’re seeing nations including the United Kingdom, France, Norway, India, and now China starting to discuss phasing out internal combustion engines entirely between 2025 and 2040. Obviously that’s got to figure in your plans because we’re talking about some of the biggest markets. Particularly China is now the biggest car market in the world.
Yes, and to be very honest this goes back to when we had to redefine Volvo when it was sold by Ford Motor Company, and we had to make a plan. How is Volvo going to look in the next ten to twenty years? We took a step back and said we can start with a new platform and we can start with new drivetrains. Because we had to restart everything and we had nothing. And you know we cannot continue with consuming either petrol or diesel in the way we have been doing as a society over the past 70 years. So, I think electrification in whatever way we generate it is considered the future for at least the automotive industry.
This is a natural step. But we are competing with a long heritage and if we want to be sustainable as an existing company, we have to take it step by step. We cannot just go for fully electrical cars and let the combustion engine go because we are not a very high-volume brand. We have to take it step by step because we have an existing customer audience and not every continent is ready for fully electrified cars.
In concert with this move towards electrification, you’ve also been working on autonomous cars. Recently we heard about plans to test a Level 4 autonomous car in Sweden in the near future. How do you think that’s going to progress and on what timeline do you think we can expect to see Level 4 autonomous cars in the United States?
To be very concrete, we believe it will be after 2020. It’s very difficult to make a firm statement at this moment because we are progressing. I’m actually pretty relaxed about it because for us this is a marathon, not a sprint. We have a reputation, and we want to live up to that reputation, for delivering the safest car in the world. We want to be totally sure that we are on the right track. That’s one of the reasons we skipped Level 3. We don’t want to have that debate over who is responsible. We take full responsibility or we don’t. As long as we can’t [take full responsibility], we don’t call it Level 4.
“We cannot continue with consuming either petrol or diesel in the way we have been doing as a society over the past 70 years.”
You see that across the automotive industry. I think everybody has become a little more cautious. The project you are talking about is also for us to see how consumers behave in certain environments. How do they react when they drive an autonomous car? It’s a step-by-step approach.
Volvo has articulated a goal that no one will be killed or seriously injured in a new Volvo by 2020. How is that progressing? Are you moving towards that goal in a way that you think will meet it?
That’s a very, very serious vision, which we started already in 2007. During the journey, we realized that passive safety is ongoing but active safety is playing an increasing role. As you know, 90 percent of all accidents are caused by human errors. And we need to take out those human errors. Active safety systems definitely help, but by far, not enough. So what we realized during the journey is that if we want to reach our vision then autonomous driving is an absolutely elementary or crucial role in that journey.
That’s why autonomous drive is so relevant for Volvo. Of course it will increase convenience, and it has a lot of other benefits. But the primary reason we spend so much time on autonomous drive is to get to our vision that nobody should be killed or injured in a Volvo by 2020.
Do you think that the future is in larger SUVs like the XC90 or do you think that market forces and fuel economy are going to move us towards smaller vehicles?
That’s a very, very difficult question to answer. I don’t want to be the clever one here, but the SUV trend was a little bit predictable. That’s why we have the XC90 and we have the XC60 and we have the XC40. Will sedans disappear totally? I don’t think so. Will smaller cars disappear? I don’t think so, but people are definitely looking for space. And I think as long as we manage to create fuel-efficient cars, SUVs or trucks, then the demand for those cars will continue. I think the industry will continue to search for fuel efficiency because people are used to their space, especially in the United States.
In Europe, it’s a totally different discussion. You will see probably an increasing number of smaller SUVs because it’s the best opportunity to learn that size still creates space. Especially in the future when autonomous drive is going to kick in and we really get to Level 4, then you can start doing other things in the car. Then it’s nice to have a little bit of breathing space. So, I think it will be a combination of the two: very space-efficient but still very fuel-efficient.
What market-changing forces are you following personally that might not be on everyone else’s mind yet?
“The primary reason we spend so much time on autonomous drive is to get to our vision that nobody should be killed or injured in a Volvo by 2020.”
I don’t want to claim that it’s on nobody else’s minds, but our vision in the mid- and the long-term is to make life less complicated for our customers. Because what we see increasingly is that because of digitization there is a seamless connection between what you do in the car, what you do at work, and what you do at home. It’s everything you do with communication or entertainment or relaxation. What you do at home will be transferred to the car or to work. It’s a whole trend of having no clear borderlines. Right or wrong, I’m not the judge here. We can see what’s happening. That has an impact on the automotive industry because we need to facilitate those requirements, those ambitions of our customer. It also changes how we behave, how we buy a car, how we maintain a car, how we interact with the retailers, how we interact with the automakers.
We have this ambition: with all this technology available, we would like to give back one week of time per year to our customers. The average American customer is spending 25 minutes on a one-way commute on a daily basis. We can give that time back with autonomous drive because you can do other things in the car.
To finish up, we’ve heard that you are personally moving on to a different role within Volvo. Can you tell us about that?
I am moving to EMEA, which is Europe, Middle East, and South Africa. I will move back to Gothenburg and I will also oversee the other two regions, which are Asia-Pacific and the Americas. So, I will be responsible for the commercial and the business operations within Volvo, including after-sale. I’m going back where I came from, and I will be based at headquarters. We need to be sustainable in the future and to fulfill our mission. We need to ensure that [features] are rolled out in a very consistent and coherent way all over the world. That will be my task.
