The transition from internal combustion engine (ICE) to electric vehicles (EVs) will be an inevitable fact and Volvo Car Malaysia remains committed to phase out all combustion engine models by 2030, if not earlier, even if deployment of EV charging infrastructure in Malaysia lags behind, said Volvo Car Malaysia’s managing director Charles Frump in an interview with BFM radio.

Globally, the Volvo Car Group aims to have EVs, specifically battery electric vehicles (BEVs) to contribute half of its global sales by 2025, and to completely phase out combustion engine models (including plug-in hybrids) by 2030.

When asked if this is achievable in Malaysia, Frump said, “We honestly would like to see it happening a little faster here. The environment is right and we want to lead in this area. Certainly by 2030 we will only be building fully electric cars, so that will also have to be the case in Malaysia.”

EVs will remain expensive but buyers need to consider EVs’ lower total cost of ownership

Frump was quite candid in saying that due to the nature of EVs being a newer, more advanced technology, it will of course be more expensive than equivalent combustion engine cars, and this is unlikely to change until the end of this decade.

However, buyers should also consider the fact that EVs require almost zero maintenance. With a lot less moving parts, there are lot less wear and tear mechanical parts to replace too, unlike a regular combustion engine car.

“Certainly there needs to be some kind of price premium on top of combustion engine cars until this technology develops, and the manufacturing develops over time, and I think that’s why governments are bringing in support elements for EVs. But even with support elements, you are going to see a premium over ICE for the foreseeable future.

“One thing that I think customers have to adjust to, is that they have to look at the total cost of ownership, not just the upfront cost but what are you spending on repairs, what are you spending on fuel versus electric, those kind of trade-offs will change the whole economics of car ownership. In the long term, the gap between ICE and EVs, the costing will become much more comparable when you do that.

“But I do foresee a premium going forward into the immediate future,” said Frump, who has a lot of experience in Asia and has previously served as managing director of Volvo Auto India and before that, marketing director for Volvo Car Japan.

But of course, Volvo is not factoring in the cost of battery replacement, which EV manufacturers don't like to talk about. 

At some point between the 10th or 15th year, the battery needs to be replaced. Many EV manufacturers including Volvo’s parent company Geely are touting 200,000 km zero degradation, 2 million km service life batteries, but again it’s still too early to tell if these claims are true in the real world.

Also read: Geely’s 200,000 km EV battery reliability claim – valid for Malaysia?

Returning back to the topic of the interview, Frump approaches all these temporary transitional glitches with a very positive view.

When asked about the high road tax for EVs (the interview was conducted before Budget 2022’s announcement), Frump says the automotive industry and its related policies have been built around combustion engines for over a century, so we shouldn’t be surprised that there will be issues that stakeholders will need a longer time to address, but none of these will change the inevitable technology transition.

“Every car company, every government is adjusting to the future being electric cars. So we shouldn’t be so surprised that there are a few gaps here and there. We have been operating under the internal combustion model for over a hundred years, so the policies and such have had time to synchronize and develop.

“Are there gaps? Of course there are gaps. It’s not just in the government. It’s in the private sector as well, like how do you change to a fundamentally different proportion system? It’s a challenge. It’s a challenge for the government to get its arms around it just as it is for car companies. But what I am happy to see is the visions of most governments and the visions of most car companies are aligning in where they want to go. They want to see electric becoming the dominant propulsion system for automobiles, and I think they are slowly putting those policies in place and adapting them. They are slowing going to adjust those policies. There is going to be some give and take over time,” said Frump.

Luxury car buyers will build their own charging infra, limited range not a problem

Like all new technologies, there will of course be barriers for the masses but there will also be early adopters will simply push through these barriers, cost included.

“Everywhere around the world now, we are seeing that when electric cars are launched, there is demand. Will that demand be for every customer in the country, will there be some that are slower than others in adoption? I certainly think so. When I am targeting customers here in Malaysia, I feel we are in a really sweet spot as a luxury car maker,” said Frump.

On concerns of limited charging infrastructure for EVs, Volvo Car Malaysia thinks this is not a problem at all, because Volvo BEVs like the upcoming Volvo XC40 Recharge Pure Electric (to be launched in Malaysia in Q1 2022), will be bought by customers who already have other equally high-end cars.

“I think I might have a different take on this, I don’t really care. I am sure for the mass automotive segments, this is a big issue, but this is an area that Volvo is very pleased to be playing in the luxury segment. Basically someone who is looking at buying, say our new XC40 Recharge, they will come in to their office, working in a nice place, and they will have the ability to have a charging station at work. Looking at the Volvo owners in KL and the places where they live, in virtually all cases I see they will be able to get a charging station at home. I think luxury customers have a little bit more access to building their own infrastructure.

“If you are looking at taking a long trip to Ipoh or wherever you are going and you are a little worried about this, all of my customers will just take their other car. Very few of my customers have only one luxury car. They have an alternate plan that can bypass the infrastructure limitations. It’s a much tougher road for non-luxury, but I really think luxury cars will lead the adoption of EVs,” said Frump.

But Volvo's position inadvertently confirms what many already suspect - that EVs are just toys for the rich and the tax-free incentive has very little multiplier effect in cutting carbon emissions.

70 percent of cars sold in Malaysia are below RM 100k. Malaysia sells about 600,000 motor vehicles (excluding bikes) per year but has over 15 million four-wheeled or more vehicles on the road.

Even if you were to switch every single new car sold tomorrow into electric the carbon emissions count will barely nudge and it still will take 25 years to make all cars on our roads zero emission.

The solution lies in accessible and reliable public transport, with MRT / LRT stations linked to neighbourhoods by electric first-mile / last-mile electric commuters, but that’s another topic.

The forthcoming Volvo XC40 Recharge Pure Electric has a claimed driving range of between 400 to 418 km (WLTP method, which the most difficult one today). The 2-motor all-wheel drive 5-seater electric SUV makes 408 PS, and goes from 0-100 km/h in 4.9 seconds, powered by a 75 kWh battery (usable capacity).

It supports up to 150 kW of DC fast charging, which takes about 40 minutes to charge up to 80 percent.

Also read: Confused by EV terms? Here's everything you need to know

With regular household single-phase AC power supply operating a 7.7 kW charging (32 Amps) wall box charger, the XC40 Recharge Pure Electric takes about 12 hours for a full charge.

Houses with higher power density three-phase AC power supply can complete a full charge in 8 hours (16 Amps, 3.8 kW).

Also read: What is CHAdeMO and CCS? Everything you need to know about charging EVs

Prices for Malaysia have yet to be announced but in Thailand, the XC40 Recharge Pure Electric (sold in Thailand under the Pure Electric moniker) starts from THB 2.59 million (about RM 330,000).

The model is imported from China (CBU) tax-free under the ASEAN-China Free Trade Agreement, so prices in Malaysia won't differ much, assuming that Budget 2022's tax-free EVs proposal is gazetted.

For reference, the locally-assembled (CKD) plug-in hybrid XC40 Recharge T5 starts from RM 255,468.