Scotland-born Jim Rowan took over as Volvo Automobiles CEO and president in March 2022, to supervise its transition to a completely electrical and largely software-driven carmaker by 2030.
Earlier than this, his most excessive profile position was as CEO of cult shopper electronics big Dyson, between 2017-2020 – which occurred to be the interval when it was growing its now-cancelled EV project.
Operating a maker of stylish vacuums isn’t your typical path to the highest of a automotive firm, with administration normally dominated by individuals who’ve accrued many years of business expertise.
For extra Motoring associated information and movies try Motoring >>
But as ‘automotive firms’ flip into ‘mobility firms’ and focus extra on batteries, chips, autonomous driving, direct-to-consumer retail and software program providers, conventional talent units could not suffice. Volvo’s guardian Geely clearly thinks so.
As a part of getting his head across the automotive enterprise and Volvo particularly, Mr Rowan is spending time in what he calls the “extremities” of the globe, with Australia one among these – a market the place Volvo just posted all-time record annual sales and guarantees to sell only EVs from 2026.
MORE: Volvo sold more EVs than ICE cars in Australia last month
We questioned what made Mr Rowan so eager to hitch the enduring Swedish automotive model, what his unusual pathway to management brings to the position, and what selections he considers most essential.
“Clearly I do not come from that business per se. I believe one of the crucial essential issues is, particularly whenever you tackle a brand new position and also you tackle a brand new business, actually making an attempt to grasp what that business’s about,” he stated to get the ball rolling.
“We’ve got about 42,000 individuals within the firm. A really excessive majority of them actually perceive automotive, so I believe it is time for us to start out bringing in another issues past automotive because the business goes by way of this modification.
“The rationale I joined Volvo is fairly easy. Three causes actually. It is a fabulous model, I grew up with Volvo, I believe it is acquired an actual authenticity, it is a model that type of stands for one thing.
“I believe it is acquired an actual genuine soul, and we see how that is manifested over time: the invention of the three-point seatbelt, however then the courageousness to really give that away as an open patent for me talks to the type of firm that I wish to work for.
“In order that was a giant issue for me when it comes to becoming a member of the corporate: the precise model itself and what it stood for.
“And then you definately’ve acquired this actually attention-grabbing – I am an engineer – [experience] as you undergo large transitions in industries, and we have a double-headed transition happening proper now in automotive.
“On one aspect you’ve got acquired the technical transition, which is from petrol to electrical propulsion and from people-driven to autonomous-driven automobiles – all of the software program, electronics, lidar, radar, cameras, sensors, code, pc expertise, all the pieces’s getting poured into that on the identical time. And as an engineer, that is simply an attention-grabbing area to be in.”
The opposite aspect Mr Rowan mentioned is the business’s shift in direction of gross sales channels managed by car-makers eager to immediately have interaction with consumers extra, and depend on franchise sellers much less. Volvo is experimenting with a direct-to-buyer mannequin within the UK and Sweden, however has no present plan to comply with its Polestar model (which it owns 48 per cent of) down this path in Australia – but.
“On the identical time, you’ve got acquired this different transition, which is direct-to-customer and constructing a related e-commerce engine that may join immediately with the tip buyer,” Mr Rowan stated.
“Not being from the business, it appears really fairly unusual to me that you could promote a 40, 50, 60, 70 thousand greenback product to a buyer and by no means converse on to that buyer. Folks walked into the [franchise] dealership, purchased the automotive by way of the dealership, after which all of the service and the interplay and connection was by way of the dealership.
“And now I believe the demographic is altering due to the best way individuals store on-line, and the best way individuals anticipate to attach immediately with the OEM that produces the product. An excellent instance of that, after all, is Apple,” he added, though Tesla can be one other.
“In order that double, heavy transition of technical and business, and naturally all the pieces [being] underpinned by the real transfer in direction of sustainability,” Mr Rowan added, is what he noticed as key elements behind his need to enter the automotive business.
“We have been I believe one of many first, let’s name it ‘conventional’, automotive firms that stated ‘we’re going all electrical’. We will be a full electrical automotive firm by 2030. We’ll be midway there by 2025. There aren’t any ifs, no buts, no maybes, that is it. We went out on an IPO on that message. We took individuals’s cash from the market to say ‘that is the place we’re taking our firm’.
“It is beginning to look extra apparent now, however when the group who made that call – which predates me, so I can take no credit score for that – that group mainly stated, you already know, ‘we’re all in right here.’ That is the route of journey and we expect we should always go there’.
When requested to broaden on what his particular talent set can carry to the corporate at such a interval of flux, Mr Rowan once more pointed to the truth that Volvo is not quick on automotive individuals, however could also be quick on individuals with a broader expertise and buyer expertise background.
“We’ve got 42,000 individuals in our firm, I am gonna say 41,500 individuals actually perceive automotive. I believe we’ve it lined is my sincere reply to that, and never simply junior individuals, however lots of senior individuals who have been in our firm for a protracted, very long time,” he advised us.
“What we do not have absolutely lined is, what’s this going to appear to be in 5 years time?” What does the considering appear to be in 5 years time?
“As a result of I come from the tech sector, I used to be amazed once I got here into the auto business simply how a lot of the IP and the expertise had been outsourced from the large automotive firms. They outsource it to what’s known as the tier one guys,” he stated, alluding to large suppliers resembling Bosch, ZF and Nvidia.
“So you’re taking the standard mannequin of designing a automotive: you go to the large tier ones, you say ‘hey I want an digital management unit for the lights and the brakes and this and that’, they usually say ‘okay we are going to promote that to you, that is the fee, we select the silicon, we select the software program and also you plug and play’.
“Tesla got here in after all and stated, ‘no, we need to do core computing expertise’. And that was the primary time something actually totally different had been completed in a very long time.
“So I am going to summarize it by saying, the large profound adjustments within the business that the business’s now shifting in direction of, which I believe I can assist carry [about] from the tech sector, as I perceive software program and perceive silicon, and in tomorrow’s world of subsequent technology mobility, in the event you do not perceive software program and silicon already, you are already in hassle.
“The issue is whenever you undergo these transitions, it appears just like the transition’s going to be linear as a result of it is 5 p.c [gains] a yr after which increase, it hits the inflection level and the gradient goes up, and it goes actually shortly.
“The massive situation is in the event you look ahead to the inflection level earlier than you make the funding, it is too late. And there is lots of firms saying ‘I am going to wait till electrification turns into absolutely mainstream and I am going to make investments’. You already know what, buddy? You’ve got simply misplaced one other market. It would not work like that.
“You see it in smartphones. I used to be within the smartphone business for a very long time [Blackberry].”
“… It will not be as profound a change within the auto business. However this principle of the oligopoly because it goes to next-generation expertise will play out. And by 2025, 26 the winners would be the winners, and lots the opposite individuals who have not invested within the expertise will not have the IP they usually’ll be again to the place they have been, which is shopping for the IP off of another tier one to try to stay related.
“And that is why we’re investing within the core computer systems. That is why we’re investing in batteries [Volvo has a JV battery plant in Sweden with Northvolt]. That is why we’re investing in our personal e-motors. That is why we’re investing in our personal inverters. That is why we do our personal battery administration system.
But it surely’s additionally why we’re very picky over what we purchase versus what we construct.
“Take infotainment. The Qualcomm Snapdragon processor is a fairly good processor, used within the majority of cell telephones. Qualcomm is aware of learn how to make silicon, we do not must be concerned in that. We have to perceive silicon, however we need not have a fab and make it.
“I am additionally very pleased as a result of, of seven billion individuals on the planet, 5 billion have gotten both an iPhone or an Android, so I believe they’ve type of acquired that lined when it comes to infotainment. I do not actually care whether or not they say ‘Hey Siri’ or ‘Hey Google’, I do not want them to say ‘Hey Volvo’, what does that actually add?
MORE: Polestar 3, Volvo EX90 to use Google HD Maps
“… Android and Apple will proceed to make large investments in these platforms as a result of they need it to stay related. In order that’s one other ‘purchase’ for us. After which we go all the best way right down to silicon, and we’re shopping for them from Nvidia. We do not make our personal SoC [system on a chip]I do not suppose we have to.”
Mr Rowan went into element on the evolving computational energy of chips and the way Volvo plans to remain in its lane as they enhance, with 2025 iterations anticipated to be able to a staggering 1000-1200 TOPs (trillions of operations per second, or tera operations per second).
“That is as a lot computational energy as anyone wants. Our job now’s to take that computational energy and do one thing significant with it,” he stated. “And that’s completed by way of the software program stack,” he added, referring to Volvo’s subsequent iteration of ADAS security programs.
“Sorry, I do know that was a protracted reply to a brief query… I ought to have simply stated software program and silicon, completed!”, Mr Rowan added.
This yr will see Volvo launch the brand new EX90 massive electrical SUV – the most secure and most computationally superior Volvo ever – and the all-new EX30 small electrical SUV.
MORE: Geely releases 2022 sales figures, Volvo and Polestar EVs up
