Gothenburg-headquartered Volvo Cars has become the latest automaker to pare back its electrification ambitions as the global slowdown in BEV sales growth continues to spook OEMs with an ICE background. Rather than aiming to sell only all-electric cars from 2030, the firm will now target 90-100pc BEV and PHEV sales by the end of the decade, with the remainder mild hybrids.
Volvo’s interim target of half its sales being fully electric in 2025 also seems to have gone, replaced by an expectation of 50-60pc BEV and PHEV.
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The firm still expects to “make the move to full electrification as and when the market conditions are suitable” and will have a full range of BEVs available “well before the end of this decade”. Despite the change in targets, it stresses that “excitement about the opportunities for Volvo Cars’ fully electric product range is stronger than ever”.
“We are resolute in our belief that our future is electric,” says Volvo CEO Jim Rowan. “However, it is clear that the transition to electrification will not be linear, and customers and markets are moving at different speeds of adoption.”
His firm blames 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 failure of consumer appetite for BEVs to grow as forecast. Volvo’s largest shareholder is China’s Geely, which is subject to a proposed additional 19.3pc tariff on its EU imports following a European Commission investigation into state subsidies for Chinese OEMs.
Volvo “continues to see the need for stronger and more stable government policies to support the transition to electrification”, the firm says.
The firm’s wobble will be particularly concerning as it has the most vocal champion among Western legacy OEMs for a fully electric future, aided by its access through Geely to more advanced Chinese EV technology. For example, it has made much of its divestment of its ICE manufacturing into its own subsidiary, now merged with Renault’s engine arm as Horse.
“We did that not only because it was a good idea for the combustion engine department, but also because it helps the rest of the company to focus on electrification,” Erik Severinson, Volvo’s head of strategy, told EV inFocus back in January. “All our future tech platforms are fully electric — there is no other way to go.”
As recently as late April, Rowan was still confidently predicting that the EU’s 20235 ban in the sale of new cars with an ICE would be felt in growing appetite fort BEV alternatives many years in advance of that deadline. “They will not make the decision whether they buy a BEV or whether they buy an ICE car on 31 December, 2034. They will make that decision much, much sooner,” Rowan forecast.
In more positive Volvo BEV news, the first batch of Volvo’s new EX90 e-SUVs are being shipped to retailers in the US and Europe, with first customers due to get their cars before the end of this month. Additional markets will see the EX90 arrive in Q4.
Over the first seven months of the year, a 62pc growth in Volvo’s BEV sales have seen the share of all-electric vehicles in its global sales mix rise to 23.5pc, up from a 16.4pc share in the same period last year (see main image). PHEVs make up another 21.7pc of its Jan-Jul sales, but mild hybrids and ICEs still comprise almost 55pc of its volumes.
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