Volvo Cars has revised its objective of becoming a fully electric vehicle manufacturer by 2030, now allowing for up to 10% of its sales to include mild hybrid models. Additionally, plug-in hybrids will be part of the remaining 90%. The automaker cites challenges in the electrification transition of the automotive market as the reason for this shift. These challenges include slower-than-expected charging infrastructure rollout, the withdrawal of government incentives in various markets, and uncertainties stemming from recent tariffs on electric vehicles.
When Volvo first unveiled its electrification goals in 2021, it aimed to sell only fully electric vehicles by 2030. The company intended to phase out internal combustion engines altogether, including hybrid models. However, several new factors have influenced this update. For instance, similar trends have been observed with other manufacturers who have also adjusted their ambitious plans in response to evolving market dynamics and regulatory changes. Many companies are now incorporating a mix of electrified vehicles, including hybrids, to adapt to market demands and infrastructure readiness.
Revised Sales Projections
Volvo’s updated target is for 90% to 100% of its global sales to come from electrified cars, combining fully electric vehicles and plug-in hybrids. Mild hybrid models will make up the remaining 10%. By 2025, the company now expects 50% – 60% of its sales to be electrified products. In comparison, Volvo aimed for 50% fully electric sales by 2025 in prior targets. During the second quarter of 2024, the share of fully electric vehicles stood at 26%, with EVs and plug-in hybrids making up 48% of sales.
Interim CO2 Reduction Goals
Volvo has also revised its interim CO2 reduction targets in alignment with its new electrification pathway. The new goals aim to reduce CO2 emissions per car by 65% – 75% by 2030, based on 2018 levels. This is a change from the previous target of a 75% reduction. By 2025, the company now targets a 30% – 35% reduction in CO2 emissions, down from a 40% reduction goal. Despite these adjustments, Volvo retains its long-term goal of achieving net-zero greenhouse gas emissions by 2040.
Jim Rowan, Chief Executive of Volvo Cars, emphasized the company’s commitment to electrification, pointing out the superior driving experience and technological advancements electric cars offer. He noted:
“We are resolute in our belief that our future is electric. 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. We are pragmatic and flexible, while retaining an industry-leading position on electrification and sustainability.”
Volvo’s revised electrification strategy highlights the company’s adaptability amid evolving market conditions. The automaker’s decision to include mild hybrids and plug-in hybrids while still aiming for a significant reduction in CO2 emissions reflects a balanced approach to sustainability. As the infrastructure for electric vehicles improves and market conditions become more favorable, Volvo plans to continue progressing towards full electrification.
