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Will Volvo's electric jolt Canada's auto industry?

Volvo announcement that they're ditching gas only vehicles in 2019 is "a bold move, but not revolutionary," according to the President of the Automotive Parts Manufacturers Association.

Volvo announced it will not launch any gas-only models after 2019

Chris Ensing · CBC News ·
Chevrolet Volt vehicles are shown on the assembly line at the General Motors Hamtramck Assembly plant in Hamtramck, Mich. (Paul Sancya/Associated Press)

Volvo's announcement that they're ditching gas-only vehicles in 2019 is "a bold move, but not revolutionary," according to the President of the Automotive Parts Manufacturers Association. 

Flavio Volpe doesn't expect the announcement will have that much impact on the Canadian parts industry.

"Suppliers of all components are working to get into Volvo's US supply chain for all kinds of parts," said Volpe.

"If this marketing strategy works and the North American consumer bites, then the potential volume and therefore value of the account for the supplier grows."

He suggests that Volvo's decision to launch only electric or hybrid models after 2019 is "likely driven by the Chinese commitment to 'new energy' vehicles."

End of an era?

"I think it is," said Matthew Stevens, CEO of FleetCarma, a clean tech company based in Waterloo.

"I think it's a big milestone the announcement that happened today but I don' think it's surprising."

Stevens said that Volvo showed it's hand earlier this year when they announced that they would stop designing diesel engines.

Matthew Stevens, CEO of Fleetcarma, tracks electric vehicle sales and found that last year they accounted for .5% of all vehicle sales in Ontario.

"I think we're going to see the others follow just because it's the right thing to do for their business," said Stevens, who owns a Chevy Volt. "I think this announcement by Volvo breaks the shell but I think they're all going to follow suit."

He said one of the reasons the industry is switching to electric vehicles is the lower cost of auto parts for those vehicles.

"When I look at that vehicle, that battery in that car was a $16,000 battery when I bought the Volt (in 2011)," said Stevens. "That same battery today is a $3,000 battery."

Stevens wouldn't say there are "signs of peril" for the auto industry in Ontario, but said this push to electric will result in winners and losers.

"The auto makers that are ready to deliver electric vehicles faster -- they'll win," said Stevens.

"The auto makers that wait too long to start building electric vehicle product will miss the window. They will shrink in size and eventually there will be layoffs."

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