Volvo Cars, whose largest stake is owned by China’s Geely, said it was responding to changing market conditions. | Representative image
Swedish carmaker Volvo Cars on Wednesday abandoned its goal of going all-electric by 2030 and said it now expects to continue offering some hybrid models in its lineup then.
Major carmakers have seen demand for electric vehicles slow, partly due to a lack of affordable models and slow rollout of charging points, as they brace for the effects of European tariffs on Chinese-made electric cars.
Shares in the company were down 7.5 percent at 1416 GMT, after trading around 4 percent lower before the announcement of the reduced targets.
Volvo Cars said in the statement that by 2030 it now aims for 90 to 100 percent of cars sold to be fully electric or plug-in hybrid models, while up to 10 percent would be so-called mild hybrids, where electric power only supplements the combustion engine.
Volvo Cars said in a separate statement that plug-in hybrids would be a key part of its future profit growth and that it would refresh its XC90 hybrid, with the first customers taking delivery of the SUV by the end of the year.
Volvo Cars sells a mix of electric and hybrid vehicles and has so far stuck to its plan to sell only fully electric vehicles by 2030, even as rivals began to scale back their ambitions. Some of Volvo’s flagship fully electric vehicles are the EX90 and EX30, both SUVs.
Rising demand for hybrid cars has prompted a strategic shift in an industry that initially aimed to phase out hybrids in favor of fully electric vehicles.
Toyota, one of the slowest automakers to develop electric vehicles, continues to bet heavily on hybrids with an increasing number of models. French automaker Renault said it will continue to launch hybrid models.
Drivers’ concerns about the range of electric vehicles are one reason buyers have turned to hybrids, which are often more affordable and convenient.
Volvo Cars, majority-owned by China’s Geely, said it was responding to changing market conditions and customer demands.
“It’s a pragmatic approach… to help our customers get on the path to full electrification. For many customers in many markets it will be a gradual journey,” Erik Severinsson, chief strategy and product officer, told Reuters.
Volvo Cars expects electric vehicles (both fully electric and hybrid) to account for 50 to 60 percent of its sales volumes by 2025. The previous target for 2025 was for at least 50 percent of vehicles to be fully electric and the rest hybrid.
“We are convinced that our future is electric,” said CEO Jim Rowan. “However, it is clear that the transition to electrification will not be linear and that customers and markets move at different speeds.”
The company, which prides itself on being a pioneer in electric vehicles, also called on politicians to adopt “stronger and more stable” government policies to support electrification.
The shift toward hybrids comes despite years of efforts by several countries to pressure automakers to phase out CO2-emitting internal combustion engines as quickly as possible.
At an event to showcase its EX90 a day before the company’s capital markets day, Volvo also showed a video teasing a future electric sedan called the ES90. Severinsson declined to say when customers could expect to order the new sedan, but said it was part of five fully electric cars the company had in development.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First published: September 4, 2024 | 22:40 IS
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.