Volvo Cars abandons 2030 EV-only target

9:32 am Wednesday, September 04th, 2024

STOCKHOLM (Reuters) -Swedish automaker Volvo Cars scrapped its target of going all electric by 2030 on Wednesday, saying it now expected to still be offering some hybrid models in its lineup at that time.

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.

Volvo Cars said in a statement that by 2030 it now aimed for between 90% and 100% of cars sold to be fully electric or plug-in hybrid models, while up to 10% would be so-called mild hybrid models if needed.

Volvo Cars sells a mix of electric and hybrid cars, and had until now remained steadfast on its plans to only sell fully electric cars by 2030 even as its rivals began scaling back their ambitions.

Many automakers have witnessed growing demand for hybrid cars, prompting a strategic shift across a sector that had initially aimed to phase out hybrids in favour of fully electric vehicles.

A slow introduction of charging infrastructure and drivers’ concerns about EVs driving ranges are among the reasons buyers have gravitated towards the often more affordable and convenient hybrids.

Volvo Cars, which is majority-owned by China’s Geely, said it was responding to changing market conditions and customer demands.

By 2025, Volvo Cars now expects electrified cars, which includes both full EVs and hybrids, to account for between 50% and 60% of sales volumes. The previous 2025 target was for at least 50% fully electric cars, with the rest hybrids.

“We are resolute in our belief that our future is electric,” CEO Jim Rowan said. “However, it is clear that the transition to electrification will not be linear, and customers and markets are moving at different speeds.”

The company also called out for “stronger and more stable” government policies to support the electrification.

(Reporting by Marie Mannes, Anna Ringstorm and Stine Jacobsen, editing by Terje Solsvik and Tomasz Janowski)