This fully globalized world with free trade will not come back. I think we will have a much more regional economy in a regionalized world. AI for sure will take out certain types of jobs which will be done more or less automatically, but that cost saving, shouldn't you use that cost saving for being faster in product development or doing something else?
So, what's your outlook on the paying industry and car industry?
So, I think it would also be very unrealistic to believe that all car brands in Europe will remain 10 years from now. The ones who will adapt, who also have the ability really to adapt, they will survive.
The European car industry is living through times of upheaval. Chinese competition, electrification, and tariffs are throwing into question the very essence of European car makers. Volvo Cars, one of the most storied European brands, has embraced these challenges head-on. After being acquired by Chinese Geely in 2010, the Swedish company has pulled off a remarkable transformation. CEO Håkan Samuelsson led Volvo Cars through its turnaround between 2012 and 2022, and is now back at the helm since 2025, joins us today. So, welcome and thank you for your time.
So, how has the way you think about international footprint and the way you deploy capital changed from your first stint as a CEO of Volvo Car until 2022?
So, I think this fully globalized world with free trade will not come back. I think we will have a much more regional economy in a regionalized world and that of course could mean that we need to double invest a bit more, as building a car only in one place and shipping it all around the world means less capex but more working capital and more freight cost, longer delivery times for customers. So the regionalization and going to a more build-where-you-sell approach, which we are doing now, is not necessarily only negative. You need more capex, but you save on opex, freight cost, and consumers will get cars faster. So I think it's something that is not that painful, it's just to accept we need to build more cars where we sell. That is just a fact. More difficult is of course that we need to really have two systems technology-wise also in the future: software and electronics, especially around connected cars. We need to have a Chinese version and a Western compliant version, so that's a bit of doubling of R&D expenses.
Geopolitical disruption also goes hand in hand with technological disruption. In this regard, you launched earlier this year production in Torslanda, your flagship plant in Torslanda just outside Gothenburg, of your EX60 electric vehicles, which I should see a number of innovations from mega casting to cell-to-body technology and also your own central computing system. So tell me a bit more how this project evolves, transforms the way you think, design, and produce, manufacture cars?
Yeah, I think first, probably the biggest news is the whole electronic structure. Where the car industry, traditionally, you buy functionality from suppliers. I mean, say, climate control, door locks, power control, powertrain control, typically are developed and delivered by suppliers, and the intelligence sits maybe in over 100 ECUs in a car. That's how it works traditionally. And then, of course, you have two aspects. The most important is, if we are going to deliver attributes and features to customers faster, then we need to develop much faster than specifying and getting the functionality in a box. We also need to download new versions over the air, which is also more complicated if you have 100 separate ECUs in the car. So timing to faster development requires a central approach. Having really the customer features and building a real software-defined car also requires you have a central approach and have control of the real programming. And then, last but not least, is of course costs. If you do this yourself, I think long-term you will come down to a lower cost level. Even though it's a big investment to take the step to come into this central approach, I think long-term you need to do it, and it's something that carmakers need to just come through a very difficult and costly transformation. And I'm just glad that we have this painful and expensive transformation behind us.
So, what does it tell us about the constraints and opportunities of doing car manufacturing in Europe today?
One is exactly what I said, that the whole system is built on having very strong suppliers which are doing a big part of it, but putting that together into one car which is developed fast is the challenge for the industry. And it's of course easier if you start from scratch. So a lot of these new brands, they were the first that had a much more central approach to the information systems. So that is a challenge for everybody in the business. And of course, the European car industry also has a huge cost challenge because there are thousands of parts in a car. And the Chinese supplier industry is probably the most competitive in the world. So the cost of parts for cars which are supplied in China is way lower than in Europe. And that's of course a problem for all of us in Europe who have a very long-lasting cooperation with all of our suppliers. We need to come down in cost because the Chinese new players will put pressure on the whole car industry. So if we think we have had competition before, I think in the future it will be worse.
