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Volvo Hands Over ICE Production to Geely, to Focus on Electric Cars

By the end of the month, Volvo would have unveiled the electric variant of the XC40, the carmaker’s first foray into the world of EVs. From that point on, there will be no stopping the carmaker from going down this road, and the most recent announcement about engine manufacturing is proof of that.
Electric Volvo XC40 5 photos
Photo: Volvo
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In a statement released on Monday (October 7), the Swedes said they agreed to merge their combustion engine operations with that of their mother company, Geely. This should pave the way for Volvo to focus solely on the creation of electric powertrains.

A new business unit will be created to support the merger, staffed by 3,000 employees from Volvo and 5,000 from Geely. No personnel cuts at either of the companies are planned as a result of the merger, says Volvo.

While Volvo will be focusing on electric powertrains, the new business will be making internal combustion engines for Geely, Proton, Lotus, LEVC, and Lynk & Co.

As for Volvo, the carmaker plans to have a fully electrified lineup soon. Half of its global sales by the middle of the next decade should be full-EVs, while the other half hybrids, with ICE powertrains supplied by the new company being set up with Geely.

“Hybrid cars need the best internal combustion engines. This new unit will have the resources, scale and expertise to develop these powertrains cost-efficiently,” said in a statement Håkan Samuelsson, Volvo Cars CEO.

The first car in the new Volvo era will be the electric XC40. Built on the Compact Modular Architecture (CMA) that was designed with electrification in mind, the SUV is already described as one of the safest cars on the road, something Volvo has always been associated with.

The carmaker did not yet reveal any details on the electric drivetrain of the car, but it did say this is the first-ever Volvo to use a new and yet undisclosed Advanced Driver Assistance Systems (ADAS) developed with Zenuity.
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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