Volvo CEO Jim Rowan thinks dropping CarPlay is a mistake
Nov 14, 2023
auto_awesome
Jim Rowan, the CEO of Volvo Cars, shares insights from his extensive background in consumer electronics, shaping Volvo's shift to an all-electric future by 2030. He discusses the industry’s major shifts: electrification, autonomy, and direct-to-consumer sales. Jim emphasizes the importance of software integration and customer engagement in Volvo's transformation, along with unique marketing strategies tailored for electric vehicles. He also explores partnerships for sustainable tech, including collaboration with Northvolt and Google for enhanced in-car experiences.
Volvo prioritizes building recurring revenue outside the car through services like maintenance and insurance instead of monetizing in-car experiences.
Volvo has developed its own base operating system, Volvo OS, with Android sitting on top of it, offering flexibility in choosing between their own OS, Android Auto, or Apple CarPlay.
Volvo focuses on safety, sustainability, and human-centric technology to differentiate themselves in the growing electric car market.
Deep dives
Shifts in the Auto Industry: Electrification, Autonomy, and Direct-to-Consumer Sales
Jim Rowan, CEO of Volvo Cars, discusses the three major shifts in the auto industry: electrification, autonomy, and direct-to-consumer sales. While most car manufacturers are integrating hardware and software to create smartphone-like experiences, Volvo is taking a different approach. They prioritize building recurring revenue outside the car through services like maintenance and insurance, rather than attempting to monetize in-car experiences. This unique perspective sets Volvo apart in the industry.
Transitioning to Core Compute and Volvo's Operating System
Volvo is undergoing a transition to core compute, where the entire car is driven by a centralized computer system. Jim Rowan explains that the company has its own base operating system, called Volvo OS, with Android sitting on top of it. Volvo has partnered with Google to bring Android and their services into the infotainment system. However, Volvo still offers the flexibility of using their own OS, Android Auto, or Apple CarPlay. By making strategic choices about what to build and what to buy, Volvo aims to provide the best customer experience while focusing on safety and efficiency.
Investing in Electric Propulsion and Sustainable Battery Manufacturing
As part of Volvo's commitment to be fully electric by 2030, Jim Rowan explains their investment in electric propulsion and battery technology. Volvo has brought the development of electric motors, inverters, and battery management software in-house to improve their efficiency. They are also working on establishing their own battery factory in collaboration with Northvolt. This emphasis on sustainable manufacturing goes beyond just the cars themselves to include the use of green energy and recycled materials in their factories and supply chains. This holistic approach to electric propulsion aligns with Volvo's vision for a more sustainable future.
The evolving marketing strategies for electric cars
The traditional marketing strategies for cars, which focused on engine performance and technical specifications, are changing as the electric car market grows. Volvo CEO Jim Rowan explains that since electric cars generally have similar driving experiences, the differentiation now lies in areas like safety, sustainability, range, and charging speed. Volvo focuses on safety, sustainability, and human-centric technology to attract customers to their brand. Rowan notes that for companies that previously emphasized performance, it may be more challenging to adapt their marketing strategies.
Volvo's approach to EV sales and margins
Volvo recognizes the demand for their cars in the premium arena and believes that their customers value safety, sustainability, and brand attributes. They address the factors that matter to customers, such as range, cost, fast charging speeds, and safety. Additionally, Volvo has set the goal of reaching gross margins on their upcoming electric car, the EX-30, between 15% and 20%, which is competitive with companies producing internal combustion engine (ICE) vehicles. Volvo aims to offer a range of technologies, including plug-in hybrids, to cater to customers' preferences as the infrastructure and battery technology continue to evolve.
Today, I’m talking to Jim Rowan, the CEO of Volvo Cars. Now, Jim’s only been at Volvo for a short time. He took over in 2022 after a decades-long career in the consumer electronics industry. Before Volvo, his two longest stints were at BlackBerry, whose QNX software is used in tons of cars, and then at Dyson, which once tried and failed to make an electric car. Jim and I talked a lot about how that unique experience has influenced how he thinks about the transformational changes happening in the world of cars.
For Volvo, the stakes are high. The company has pledged to be all-electric by the end of the decade, and Jim is also making some very different bets on software and revenue than the rest of the car industry. Jim’s view is that automakers are undergoing three major shifts all at once: electrification, autonomy, and direct-to-consumer sales. With Volvo, Jim is trying to steer the ship through these changes and come out an EV-only carmaker on the other end.
