Electric cars are transforming the auto industry much in the same way these juiced-up vehicles drive: You don't hear them coming -- until suddenly they're by you. 
 
 Volvo's ambitious plan to offer electric engines across its entire fleet highlights just how fast traditional carmakers are plugging in, even as sales of all-electric and hybrid vehicles in the U.S. remain fairly modest. But with Tesla (TSLA) recently cruising by Ford (F) and nip-and-tuck with General Motors (GM) as America's largest automaker by market value, the stodgy combustion engine is showing its age. 
 
 If you needed a blaring highway billboard that the venerable pistons-valves-gasoline era is waning, Volvo hoisted it for all to see on Wednesday, with its announcement that starting in 2019, its full lineup will have some kind of electric motor. 
 
 Volvo plans to launch five fully electric cars between 2019 and 2021, three of which will be sold under the Volvo brand and two high-performance models to be marketed under the company's luxury Polestar brand. Additional details about the vehicles will be announced at a later date. 
 
 The automaker also plans to provide a range of gasoline and diesel plug-in hybrids and mild hybrids, which Volvo said would be one of the "broadest electrified car offerings of any carmaker." The Swedish automaker, which was acquired by China's Geely Holding Group in 2010, has been developing electric vehicles for the past few years, such as a variant of its C30 hatchback and a hybrid-diesel version of its V60 station wagon. 
 
 Volvo sold a record 534,332 vehicles last year, and it expects to sell 1 million electrified vehicles in less than a decade. 
 
 "Frankly, it costs a lot of money to develop an electric vehicle," said Brett Smith of the Center for Automotive Research. "It's technology they're developing from scratch, which means a whole lot of R&D investment." 
 
 Other automakers are increasingly weaning themselves off gasoline-powered engines. 
 
 Mercedes-Benz parent Daimler on Wednesday also announced plans to invest 5 billion Chinese renminbi ($740 million) in a battery plant in China that it will run with China-based BAIC. The partners plan to sell electric vehicles under the Mercedes brand name by 2020. 
 
 Green vehicle demand is already booming in China. Forecasts are calling for sales of 580,000 units in 2017, an increase of 58 percent from 2016, even though the Chinese government eased up on subsidies. 
 
 "Many of the luxury brands are going to move in this direction over time just because their consumers really demands performance, said Smith. "In China right now, there is an enormous amount of enthusiasm for electrification." 
 
 Volvo also is being spurred by the success of Elon Musk's Tesla, which has a market valuation of $52.4 billion, topping Ford's (F) $46 billion and Fiat Chrysler's (FCAU) $16 billion, while GM's is just about $54 billion. Tesla shares, however, were punished on Wednesday (down 7.2 percent, or $25.53, to $327.09), amid worries about lower-than-expected sales of its Model S cars and Model X SUV caused by constrained supplies of batteries. 
 
 Analysts are now also worried about competition from Volvo and others. German luxury brand BMW expects to deliver 100,000 electrified vehicles this year. It also plans to debut a new i8 roadster in 2018, a fully electric Mini in 2019 and a fully electric X3 in 2020. Japanese automaker Honda (HMC) and partner Hitachi recently formed an electric vehicle joint venture, while Toyota (TM) has sold more than 10 million hybrids since 1997. 
 
 The Big 3 U.S. automakers are also pouring money into electric vehicles. GM this year began selling the Chevrolet Bolt for about $35,000 before government subsidies. Ford plans to spend $4.5 billion over the next five years on 13 new electric vehicles, including hybrid versions of its Mustang muscle car and F-150 pickup. 
 
 Meanwhile, Fiat Chrysler has announced plans for hybrid versions of some models such as the Pacifica minivan, though it has yet to unveil an electric-only vehicle. 
 
 Regardless, as Volvo has just demonstrated, the road ahead for carmakers looks increasingly electrified. ||||| Say what you like about Volvo, whose vehicles are famously safe but boring, its staff certainly know how to write a press release. On Wednesday, the Swedish auto-maker declared the end of the “solely combustion engine-powered car” and trumpeted how from 2019 all of its cars will have an electric motor. 
 
 To be clear, that doesn’t mean Volvo -- owned by China's Geely Automobile Holdings Ltd. -- is about to do away entirely with petrol or diesel engines, nor will it sell only fully electric cars, a la Tesla Inc. 
 
 While Volvo does plan several battery-electric models, many of its vehicles will still have a combustion engine. The difference is that, from 2019, all will be assisted by an electric motor to make them more fuel-efficient. So-called "mild-hybrid systems" use an electric motor to support propulsion from a combustion engine, whereas "plug-in hybrids" let a car run fully in electric mode for a while. Volvo will sell both. 
 
 Volvo’s announcement is environmentally pleasing, but its suppliers are probably the biggest winners. Cars that need both combustion engines and electric motors are a win-win for the autos supply chain because there’s potential to contribute a lot more technology in each vehicle. 
 
 Take France's Valeo SA, which thinks the stuff it supplies for the powertrain of a high-voltage, plug-in hybrid is nine times more valuable than in a regular car. For pure electric vehicles, it's just seven times as much. That’s not bad either, but it suggests hybrids -- which last year made up about 2 percent of Europe's car sales -- are the supplier sweet-spot. 
 
 This extra sales opportunity is one reason Valeo shares trade on almost 14 times earnings and Germany's Continental AG fetches almost 12 times. In contrast, prestigious customers such as BMW AG and Daimler AG trade on barely half that. 
 
 Electrified Suppliers Automaker stocks have lagged behind the supplier base Source: Bloomberg 
 
 There’s a catch, though. While a few golden years beckons for suppliers, the plug-in hybrid era probably won’t last too long. From a cost perspective, it’s a bit daft to have both an electric motor and a combustion engine in the car. 
 
 Berenberg analysts think electric powertrains could be priced the same as hybrids by about 2021 and will be as cheap as combustion engines by 2025. Indeed, Volkswagen AG says as many as one-quarter of its sales will be fully electric by 2025. That's when some of the hybrid magic might wear off. Suppliers could face new rivals and carmakers may decide to bring more powertrain work in-house, if only to give employees who built combustion engines something to do. 
 
 Technologies like fuel-injection and exhaust systems, which suppliers build for petrol and diesel vehicles, will become obsolete too (see my recent piece on Germany's Schaeffler AG). 
 
 So hybrids look destined for a far shorter lifespan than the world-changing combustion engine. Suppliers may look back at Volvo's announcement as the very best of times. 
 
 This column does not necessarily reflect the opinion of Bloomberg LP and its owners. 
 
 (A previous version of this story was updated to include the name of Volvo's owner, Geely.) ||||| Image copyright Getty Images 
 
 Carmaker Volvo has said all new models will have an electric motor from 2019. 
 
 The Chinese-owned firm, best known for its emphasis on driver safety, has become the first traditional carmaker to signal the end of the internal combustion engine. 
 
 It plans to launch five fully electric models between 2019 and 2021 and a range of hybrid models. 
 
 But it will still be manufacturing earlier models that have pure combustion engines. 
 
 Geely, Volvo's Chinese owner, has been quietly pushing ahead with electric car development for more than a decade. 
 
 It now aims to sell one million electric cars by 2025. 
 
 "This announcement marks the end of the solely combustion engine-powered car," said Hakan Samuelsson, chief executive of Volvo's carmaking division. 
 
 "People increasingly demand electrified cars, and we want to respond to our customers' current and future needs," he said. 
 
 Analysis: Theo Leggett, BBC business correspondent 
 
 Volvo's announcement sounds dramatic, but the reality is it simply reflects the direction much of the auto industry is travelling in. 
 
 The internal combustion engine is not dead - and won't be for a while at least. It still offers a relatively cheap and well-proven means of getting around. 
 
 The problem is that emissions regulations are getting much tighter. From 2021, for example, carmakers in the EU will have to ensure that across their fleets, average CO2 output is no higher than 95g of CO2 per kilometre. That's a lot lower than current levels. 
 
 Carmakers are reacting by developing fully-electric models. Some are already pretty impressive. But developing mass market cars that are affordable and have the right levels of performance is a research-intensive and expensive process, while persuading consumers to buy them in large numbers may also be time consuming. 
 
 In the meantime, hybridisation - fitting electric motors to cars which also have conventional engines - offers a convenient way to bring down emissions without harming performance. And there are plenty of different kinds of hybrid systems to choose from. 
 
 Volvo is making headlines, but other manufacturers are doing much the same kind of thing. 
 
 Tim Urquhart, principal analyst at IHS Automotive, said the move was a "clever sort of PR coup - it is a headline grabber". 
 
 "It is not something that moves the goalposts hugely," he said. 
 
 "Cars launched before that date [of 2019] will still have traditional combustion engines. 
 
 "The announcement is significant, and quite impressive, but only in a small way." 
 
 Tesla targets 
 
 It comes after US-based electric car firm Tesla announced on Sunday that it will start deliveries of its first mass-market car, the Model 3, at the end of the month. 
 
 Elon Musk, Tesla's founder, said the company was on track to make 20,000 Model 3 cars a month by December. 
 
 His company's rise has upset the traditional power balance of the US car industry. 
 
 Tesla, which makes no profits, now has a stock market value of $58bn, nearly one-quarter higher than that of Ford, one of the Detroit giants that has dominated the automotive scene for more than a century. ||||| Image copyright Getty Images 
 
 Volvo's announcement certainly electrified the internet. The Chinese-owned carmaker caused great excitement on Wednesday when it said that every vehicle it launches from 2019 will have an electric motor. 
 
 This, it added, marked a "historic end of cars that have only an internal combustion engine". 
 
 There is no doubt that the car industry is changing at speed. From electric vehicles, to self-driving technology, to investments in ride-sharing and taxi companies, carmakers are trying to get a toehold in areas that have the potential to upend the automotive sector in the coming years. 
 
 But it isn't clear that Volvo's latest move presents a big acceleration in the pace of change. 
 
 How electric is electric? 
 
 The BBC's Theo Leggett points out that all the car companies are responding to tighter emissions standards that will apply across their fleets from 2021. Introducing electric or partly electric vehicles can only help with that. 
 
 Indeed, Volvo already offers a plug-in hybrid option for its top of the range models, like the XC90. Other car companies are heading in the same direction. Jaguar Land Rover last year said it expects up to 50% of its range to be electrified by 2020. 
 
 It is also worth asking just how electric we are talking. Volvo said it would introduce a "portfolio of electrified cars across its model range, embracing fully electric cars, plug-in hybrid cars and mild-hybrid cars". That covers a wide range of outcomes. 
 
 Mild hybrids are essentially a standard car, typically with a petrol engine. But they have a larger battery which can help at low speeds. The battery is a booster for the engine, improving efficiency. But it only works at low speeds and for short distances - think of it as a helping hand as you pull away from the lights in a built-up, busy area. 
 
 One large car company puts the fuel economy benefit for mild hybrids at about 6%, around towns and cities where it is most likely to be used. That is a far cry from the fully electric future espoused by Tesla, and other car companies. 
 
 Image copyright Getty Images 
 
 Fully electric vehicles remain expensive, both for carmakers and for customers. Meanwhile, a range of 250 to 300 miles still provides challenges. 
 
 That is one reason the industry is also focused on so-called plug-in hybrids. These have an electric engine that can travel perhaps 50-60 miles, before a traditional petrol or diesel engine takes over. The trouble here, as with standard hybrids, is that the extra weight from the engines makes the car quite inefficient when it reverts to burning fossil fuels. 
 
 Money 
 
 Ultimately, lift-off for electric vehicles boils down to costs. Most electric vehicles are still loss-making for the carmakers, and more expensive for car buyers. Widespread adoption relies on lower energy and maintenance costs balancing a higher sticker price for the buyer (where the carmaker also makes some profit). 
 
 Analysts at UBS recently upped their forecast for sales of electric vehicles, on the basis that this cost parity can be achieved earlier than expected. They see sales really picking up from 2020, forecasting that by 2025 electric vehicle sales could account for 14% of the car market. 
 
 Given that emissions standards are only pushing the industry in one direction, carmakers have every incentive to promote electric vehicles (or vehicles with a part electric option). Greater volumes will start to reduce costs. 
 
 There is another important factor in terms of how quickly the electric future arrives. Remember Nissan: In last year's discussions with the UK government after the vote to leave the European Union, the Japanese company had a particular set of concerns around further investment in its huge Sunderland plant. 
 
 As a "global leader in electric cars" it wanted changes to help the roll-out of charging stations, as well as tax incentives to encourage the purchase of electric vehicles. Those were areas where the government swiftly acted. 
 
 As much as anything, the point at which electric vehicles really motor will be determined by governments. ||||| STOCKHOLM (Reuters) - All Volvo car models launched after 2019 will be electric or hybrids, the Chinese-owned company said on Wednesday, making it the first major traditional automaker to set a date for phasing out vehicles powered solely by the internal combustion engine. 
 
 The Sweden-based company will continue to produce pure combustion-engine Volvos from models launched before that date, but its move signals the eventual end of nearly a century of Volvos powered solely that way. 
 
 While electric and hybrid vehicles are still only a small fraction of new cars sales, they are gaining ground at the premium end of the market, where Volvo operates and where Elon Musk’s Tesla Motors has been a pure-play battery carmaker from day one. As technology improves and prices fall, many in the industry expect mass-market adoption to follow. 
 
 “This announcement marks the end of the solely combustion engine-powered car,” Volvo Cars CEO Hakan Samuelsson said. 
 
 The company, owned by Zhejiang Geely Holding Group, said five new models set to be launched in 2019 through 2021 - three of them Volvos and two Polestar-branded - would all be fully electric. 
 
 “These five cars will be supplemented by a range of petrol and diesel plug in hybrid and mild hybrid 48-volt options on all models,” Volvo said. “This means that there will in future be no Volvo cars without an electric motor.” 
 
 The electric models will be produced at Volvo plants world-wide - it has factories in Europe and China and is building one in the United States - while development costs will be met from within its existing budget, Samuelsson told Reuters. 
 
 “This also means we won’t be doing other things. We of course will not be developing completely new generations of combustion engines,” he said about future investment needs. 
 
 Volvo has invested heavily in new models and plants since being bought by Geely from Ford in 2010, establishing a niche in a premium auto market dominated by larger rivals such as Daimler’s Mercedes-Benz and BMW. 
 
 Part of its strategy has also been to embrace emerging technologies that allow higher performance electric vehicles as well as, eventually, self-driving cars. 
 
 Only last month, Volvo said it would reshape its Polestar business into a standalone brand, focused on high-performance electric cars aimed at competing with Tesla and the Mercedes AMG division. 
 
 Volvo has also said it will build its first fully electric car in China based on its architecture for smaller cars which will be available for sale in 2019 and exported globally. 
 
 Still, Volvo is not alone among traditional carmakers in pushing strongly into electrics and plug-ins – or among premium brands in resorting to 48V mild hybrid systems to lower fuel consumption and CO2 emissions from their combustion-engine cars. 
 
 Slideshow (4 Images) 
 
 Among them, BMW plans to introduce an electric version of its popular 3 series in September to meet the challenge from Tesla, Handelsblatt reported last month. 
 
 Volvo has also taken steps towards an eventual listing, raising 5 billion crowns from Swedish institutional investors through the sale of newly issued preference shares last year, though the company has said no decision on an IPO has been made. 
 
 “It is still an option and a question for our owner,” Samuelsson said. ||||| China is preparing to put the brakes on gasoline and diesel cars. 
 
 The country, home to the world's largest auto market, is working on a plan to ban the production and sale of vehicles powered solely by fossil fuels, officials say. 
 
 The Chinese government is following in the footsteps of countries like India, France, Britain and Norway, which have already announced plans to ditch gas and diesel cars in favor of cleaner vehicles in the coming years. 
 
 Related: Ford will create new brand to make electric cars in China 
 
 Regulators haven't decided yet when the Chinese ban would take effect, but work has begun on a timetable, according to China's vice minister of industry, Xin Guobin. 
 
 He warned carmakers they need to adjust their strategies to the changing situation, according to state-run Chinese news agency Xinhua. 
 
 Authorities will offer subsidies of as much as half the retail price of electric and some hybrid vehicles to help buoy production, Xinhua reported, citing an official from the Chinese Finance Ministry. 
 
 Related: These countries want to ditch gas and diesel cars 
 
 The subsidies are good news for electric car manufacturers. 
 
 Dozens of models are already on sale in the world's second-largest economy. International auto giants like Ford (F), and Volkswagen (VLKAF) are aiming to develop fully electric cars in China. GM (GM) already sells the fully electric Bolt in the U.S. and the tiny Baojun 100 in China. 
 
 Tesla (TSLA) stock climbed 5% on news in U.S. trading Monday. Tesla sells only all-electric cars and is rolling out its first mass-market car, the Model 3. 
 
 The Chinese market is already dominated by domestic manufacturers like BAIC and BYD (BYDDF), which have aggressively pursued the electric vehicle business. BYD shares gained 4.6% in Hong Kong on Monday following the Chinese officials' comments about the potential ban over the weekend. 
 
 Chinese-owned Volvo (VOLAF) announced in July that every car it makes from 2019 onward will have an electric motor. 
 
 Related: GM is selling a $5,000 electric car in China 
 
 Plagued by air pollution, China has been swift to adopt the technology. 
 
 Last year, China accounted for more than 40% of the 753,000 electric vehicles sold worldwide, according to the International Energy Agency. That's more than twice as many as the number sold in the U.S. 
 
 But while electric sales are increasing fast in China, it remains an overwhelmingly gas and diesel dominated market. 
 
 Of the roughly 28 million vehicles sold in China last year, just over 1% were electric, according to the International Energy Agency. The agency defines electric cars as ones powered by batteries or hybrid cars that plug into the power source. 
 
 The Chinese government wants 5 million electric cars on the country's roads by 2020. ||||| As analysts weigh in on Volvo’s electric and hybrid vehicle plans—with a mix of reactions ranging from skeptical and “meh” to cautious optimism and even enthusiasm— the news prompted at least one to conclude that it doesn’t bode well for Tesla. Or at the very least should provide a wake-up call to the company and its shareholders. 
 
 Tesla believers will likely view Volvo’s declaration that every new car made in 2019 and beyond will have an electric motor as a validation of CEO Elon Musk’s vision of a future of sustainable, electric transportation, Barclays auto analyst Brian A. Johnson wrote in a research note Wednesday. 
 
 Johnson takes a different, and darker, view, saying it provides more evidence (especially after a recent visit to China) that “Tesla will face intense competition by next decade” from legacy automakers who are expanding their electric options. 
 
 Johnson makes three points that he describes as “reality checks” on Tesla’s valuation. His main points: 
 
 While Tesla might have a lead in battery costs, at least outside of China, other scale advantages of legacy automakers likely means the cost-per-vehicle advantage will not be meaningful. (Johnson did admit that Tesla is well ahead on key tech components such as software, Big Data, and the ability to improve performance and fix bugs via “over-the-air” software updates.) Tesla faces competition not just from pure all-electrics, but from hybrids. Johnson notes that nearly every major automakers is planning to roll out 48-volt hybrids and many may offer plug-in hybrids. China’s competitive environment is “stacked against Tesla” even though regulatory pressures there makes it a prime market for electric and plug-in electric vehicles. His argument: plug-in hybrids and low-end EVs are “vastly more popular” than Tesla, local regulations favors local companies, a flood of cheap Chinese batteries will negate any advantages from the multi-billion battery factory Tesla is building near Reno, Nev. 
 
 Of course, Musk’s reaction to all of this will likely follow previous comments about automakers deciding to produce electric vehicles: the more, the merrier.
– Volvo made big headlines Wednesday when it became the first traditional automaker to announce that all of its cars would be at least partially electric in 2019. The trend away from old-school engines may seem inevitable, but the Wall Street Journal has a sobering stat for electric advocates: Less than 1% of the more than 17.5 million vehicles sold in the US last year were all-electric. That probably won't change unless gas prices rise, charging stations multiply, and government subsidies remain in place. Other developments: Overhyped? The BBC notes that Volvo promised a "portfolio of electrified cars across its model range, embracing fully electric cars, plug-in hybrid cars, and mild-hybrid cars." That's a little vague. Hybrids still use combustion engines, so it's not all that clear just how "electric" the company will be in 2019. "Mild hybrids" in particular are essentially standard cars whose engines get the occasional boost from an electric motor. Look out, Tesla: Still, this is a sign that Tesla, which rolls out a more affordable all-electric model on Friday, will face "intense competition by next decade" from legacy auto companies, writes a Barclays analyst, per Fortune. He lays out the reasons why, including hybrids sold by other automakers. (Tesla has lost $10 billion in valuation over the last two weeks, notes Quartz.) Transition: Hybrids may indeed be big sellers in the next five years or so, but don't expect the trend to last long term. The reason is simple: "From a cost perspective, it's a bit daft to have both an electric motor and a combustion engine in the car," writes Chris Bryant at Bloomberg. That tax credit: Buyers of electric cars are likely counting on a $7,500 federal tax credit, but a post at Electrek makes a key point: The credit starts being phased out once a particular automaker hits the 200,000-vehicle mark. For Tesla, it's doubtful that would happen by the end of the year, but potential buyers will want to pay attention in 2018. China's role: An analyst at Autotrader tells the Washington Post that Chinese ownership of Volvo likely played a big role in the shift. The Chinese market is obviously huge, as are concerns there about air pollution. US automakers: Despite the caveats, Volvo's move shows that the "road ahead for carmakers looks increasingly electrified," writes Jonathan Berr at CBS Money Watch. That includes the Big Three in the US: GM has its $35,000 Chevy Bolt, Ford has 13 new electric vehicles in the works, and Fiat Chrysler is planning hybrid versions of the Pacifica minivan and other models.