Volvo Cars has adjusted its target for electrification by 2030, now aiming for 90 to 100 percent of its global sales to consist of electrified vehicles, which include both fully electric and plug-in hybrid models.
This marks a shift from its previous goal of achieving a fully electric lineup by 2030. The revised target allows for a small percentage (0-10 percent) of mild hybrid models to remain in the lineup, should market conditions necessitate it.
By 2025, Volvo Cars expects electrified vehicles to make up 50 to 60 percent of its total sales, as the company continues to expand its fully electric offerings. Despite this adjustment, Volvo Cars remains committed to full electrification in the long term, with plans to have a complete range of fully electric models ready before the decade’s end. This strategy will enable the company to transition fully to electric vehicles as market conditions become more favorable.
During the second quarter of 2024, fully electric vehicles accounted for 26 percent of Volvo’s sales, the highest among its premium peers, with electrified models (including plug-in hybrids) making up 48 percent of total sales. Volvo Cars reported revenue of SEK 399.3 billion and core operating profit of SEK 25.6 billion in 2023.
Volvo Cars has launched five fully electric models to date, including the EX40, EC40, EX30, EM90, and EX90. Notably, the EX30 is currently the third best-selling EV in Europe.
Volvo’s decision to adjust its electrification target comes in response to several market challenges, including slower-than-expected growth in charging infrastructure, the withdrawal of government incentives in some regions, and uncertainties due to new tariffs on EVs. The company emphasizes the need for stronger and more stable government policies to support the global transition to electric vehicles.
Major automakers have seen slowing demand for EVs partly due to a lack of affordable models and the slow roll-out of charging points, and Volvo Cars is also bracing for the effects of European tariffs on electric cars made in China, Reuters news report said.
Volvo Cars, which is majority-owned by China’s Geely, said it was responding to changing market conditions and customer demands.
Toyota continues to bet strongly on hybrids with an increased number of models. Renault tab said that it would continue to launch hybrid models.
Despite the challenges, Volvo Cars continues to invest in its long-term electrification strategy, ensuring a balanced portfolio of plug-in hybrids and mild hybrids that serve as a bridge to an all-electric future. The adjustment is not expected to impact the company’s capital expenditure plans.
By 2030, Volvo Cars aims to have reduced CO2 emissions per car by 65-75 percent compared to a 2018 baseline, an adjustment of the previous 75 percent reduction ambition.
For 2025, Volvo Cars aims for a 30-35 percent reduction versus a 2018 baseline, instead of the previous aim of a 40 percent reduction.
Baburajan Kizhakedath