Leonid Bershidsky, Columnist

Tesla Is Starting to Face Serious Competition

Volvo's two biggest markets have excellent incentives for electric vehicle production and bad ones for imports.

July 5, 2017 at 3:25 PM UTC

Leonid Bershidsky, formerly Bloomberg Opinion’s Europe columnist, is a member of the Bloomberg News Automation Team. He recently published Russian translations of George Orwell’s “1984” and Franz Kafka’s “The Trial.”

The rubber starts to meet the road.
Photographer: Jerry Lampen/AFP -- Getty Images

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Volvo's announcement that it intends to starts phasing out purely gasoline- and diesel-powered cars starting in 2019 in favor of electrified models appears strategically timed to coincide with the start of production of Tesla's Model 3, which should be hitting the streets by the end of this month. It's scary news for Tesla: The market for electric cars is largely government-driven, and Chinese-owned Volvo is taking advantage of especially generous government support.

Volvo's model cycle is about seven years. This means it'll keep making purely gasoline- and diesel-powered cars for some time past 2019, but the new models will be, at the very least, hybrids; all of them will have electric engines. "This is about the customer," the company's press release quoted Volvo chief executive Hakan Samuelsson as saying. "People increasingly demand electric cars."