Volvo (STO: VOLVB) capping limit on max speed on their cars, to no longer above 180km/h - do you think it will affect their stock price? - Seedly

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Asked by Anonymous

Asked on 05 Mar 2019

Volvo (STO: VOLVB) capping limit on max speed on their cars, to no longer above 180km/h - do you think it will affect their stock price?

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Leonard Tan
Leonard Tan
Level 6. Master
Answered on 15 Apr 2019

Fun fact: This technology is not exactly new and unique to Volvo! Carmakers actually can tamper with software to set hard limits to their hardware. However this is the first time this has been proudly done and publically announced- probably as a PR marketing stunt.

Volvo is well known for their vehicle safety. This initiative would definitely go on to further solidify and reinforce that brand image it has. While it is indeed a unique initiative, I do not see Volvo's future cashflows would be deeply improved by this move. In the long run, cost cutting measures and technological advancement- especially in the push for electric vehicles and self-driving vehicles would be where the majority of potential growth lies in.

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