Volvo adjusts electrification aims on changing market conditions, customer demands
Automaker Volvo Cars has decided to adjust its electrification ambitions due to changing market conditions and customer demands, it said Sept. 4.
Volvo said it now aims for 90%-100% of global sales by 2030 to consist of mix of fully battery electric vehicles (BEVs) and plug-in hybrid vehicles, with the remaining 0%-10% allowing for a limited number of mild hybrid models to be sold, if needed.
Its previous ambition was to phase out internal combustion engine cars, including hybrids, and sell only BEVs by 2030.
The automaker said factors behind the move included "slower than expected" rollout of charging infrastructure, withdrawal of government incentives in some markets and additional uncertainties created by recent tariffs on EVs in various markets.
"With this in mind, Volvo Cars continues to see the need for stronger and more stable government policies to support the transition to electrification," it said in a statement.
Volvo expects its percentage of electrified products to be around 50%-60% by 2025 and to have a complete lineup of BEVs available "well before the end of this decade."
This was not much changed from its previous interim goal of global sales of 50% BEVs by 2025, with the rest being hybrids.
Volvo already has five BEVs on the market and another five models in development.
In the second quarter of 2024, Volvo’s share of fully electric cars stood at 26%, which it said was the highest among all its premium peers, while its share of BEVs and plug-in hybrids was 48%.
"Volvo Cars remains committed to its long-term ambition of full electrification, and the company’s long-term investment plan and product strategy remains geared towards fully electric cars," it said, adding that the ambition adjustment was not expected to have any material impact on its capital expenditure plans.
The automaker said its long-term aim remained to become a fully electric car company, and it kept its goal of reaching net-zero greenhouse gas emissions by 2040.
"We are resolute in our belief that our future is electric," Volvo Cars CEO Jim Rowan said in a statement.
"An electric car provides a superior driving experience and increases possibilities for using advanced technologies that improve the overall customer experience. However, it is clear that the transition to electrification will not be linear, and customers and markets are moving at different speeds of adoption," he said.
Although its 2050 emission goal remained unchanged, Volvo updated its CO2 reduction targets in light of the strategy change. It said it now aims to reduce CO2 emissions per car by 65%-75% by 2030 compared to a 2018 baseline, which had previously been set at exactly 75%. For 2025, Volvo is now aiming for a 30%-35% reduction, down from 40% previously.
"Volvo Cars plans to make further progress, including by working with its suppliers to continue to reduce CO2 emissions from materials across the company’s value chain," it said.
In the first half of 2024, it said CO2 emissions per car were 25% lower than its 2018 benchmark.