Yet another automaker has abandoned its lofty goal of producing only electric vehicles by 2030. Amid initial excitement surrounding EVs over the past few years, consumer interest in the novel technology has plateaued for numerous reasons, leading car companies to scrap their previous targets for phasing out the internal combustion engine from their lineups.
Swedish luxury car brand Volvo is the most recent company to come out with a significant revision of its electrification strategy, where executives noted in a press release that it would no longer plan to sell all EVs by the end of the decade. “It is clear that the transition to electrification will not be linear, and customers and markets are moving at different speeds of adoption,” Volvo CEO Jim Rowan said in a public statement.
With five fully electric cars (EVs) already on the market and another five models in development, full electrification remains a key pillar of Volvo Cars’ product strategy. Its long-term aim remains to become a fully electric car company, and it also aims to reach net zero greenhouse gas emissions by 2040.
However, the press release began by maintaining that it would seek to become a fully-electric brand long-term while striving to be “net zero” by 2040. “With five fully electric cars (EVs) already on the market and another five models in development, full electrification remains a key pillar of Volvo Cars’ product strategy. Its long-term aim remains to become a fully electric car company, and it also aims to reach net zero greenhouse gas emissions by 2040,” Volvo added.
According to the car company, it is focusing its production on hybrid car models, a strategy that many other auto manufacturers have opted for as there is substantial consumer demand for such vehicles. “While Volvo Cars will retain its position as an industry leader in electrification, it has now decided to adjust its electrification ambitions due to changing market conditions and customer demands,” the statement added. “Going forward, Volvo Cars aims for 90 to 100 per cent 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 company further emphasized the long-term electrification targets, “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. The adjustment to its ambitions is not expected to have any material impact on the company’s capital expenditure plans.”
Volvo also specified the unfavorable business risks that EVs have been presented. “At the same time, there has been a 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.”
Rowan added, “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.”
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