Volvo has declared that it has abandoned plans to sell only electric cars by the end of the decade. The Swedish auto manufacturer is the latest carmaker to walk back ambitious electric vehicle plans.
Volvo was one of the first automakers to promise an electric-only lineup. However, Volvo has scrapped its plan to sell only electric vehicles – just three years after it pledged it would "become a fully electric car company by 2030."
'It is clear that the transition to electrification will not be linear, and customers and markets are moving at different speeds of adoption.'
Volvo said the company needed to "adjust its electrification ambitions due to changing market conditions and customer demands."
"Going forward, Volvo Cars aims for 90 to 100 percent of its global sales volume by 2030 to consist of electrified cars, meaning a mix of both fully electric and plug-in hybrid models – in essence, all cars with a cord," the car company stated in a press release shared on Wednesday.
Volvo noted, "This replaces the company’s previous ambition for its lineup to be fully electric by 2030."
“We are resolute in our belief that our future is electric,” said Jim Rowan, CEO of Volvo Cars. “An electric car provides a superior driving experience and increases possibilities for using advanced technologies that improve the overall customer experience."
Rowan admitted, "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 blamed "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" for the lower demand for electric vehicles.
Volvo Cars proclaimed there is a "need for stronger and more stable government policies to support the transition to electrification."
The car company said it expects to feature 50% to 60% of its lineup as electrified vehicles by 2025.
Volvo said the share of fully electric cars in its lineup stood at 26% during the second quarter of 2024, adding that this is the highest level among its premium peers. The car company stated that EVs and hybrid vehicles account for 48% of its lineup.
Volvo is owned by the Chinese car company Geely. Volvo and Geely also own the Polestar EV brand.
Last week, Bloomberg reported that Polestar had suffered $242.3 million in operating losses for the second quarter. Polestar admitted that revenue had dropped 17% to $574.9 million due to “lower global volumes and higher discounts.”
Bloomberg reported, "Once a vanguard of the electric-car movement, Polestar is grappling with high costs and increasing competition from new players, including from China. At the same time, consumer demand for EVs is waning amid high inflation and the end of subsidies in key markets, forcing some carmakers to offer discounts."
Volvo's reversal of ambitious goals of electric vehicles comes at a time when other automakers have dialed back their commitments to EVs.
As Blaze News previously reported last month, Ford Motor Company announced measures to scale back multiple EV plans. Ford killed plans to manufacture a large, three-row electric SUV. The American auto manufacturer also developed a new plan to focus on smaller, cheaper EVs as the future, while hybrid technology will be utilized for powering larger vehicles. Ford will also reduce future capital expenditure plans on pure EVs from 40% to 30%. Ford's EV division is reportedly on pace to lose as much as $5.5 billion this year.
Three years ago, Mercedes-Benz proclaimed it would feature an all-electric car lineup in 2030 "where market conditions allow." However, in February, Mercedes backpedaled and indicated it would continue to manufacture internal combustion engine cars and hybrids well past 2030.
"Spurred on by weaker than expected demand for EVs, this about-face was the most recent indication that the global car industry is growing increasingly pessimistic about an all-electric future," according to Forbes.
Reuters reported in June that General Motors downgraded its 2024 EV production forecast from 300,000 units to 250,000.
Porsche watered down its plans to become an all-electric car company in July.
"The transition to electric cars is taking longer than we thought five years ago," Porsche said in a statement. "Our product strategy is set up such that we could deliver over 80% of our vehicles as all electric in 2030 – dependent on customer demand and the development of electromobility."
According to Edmunds sales data, new car sales of electric vehicles in the U.S. were only 6.8% in May 2024.
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