Volvo Cars has adjusted its electrification strategy, softening its initial target to become a fully electric vehicle company by 2030. The new plan allows for up to 10% of sales to include mild hybrid models, while the remaining sales will consist of a mix of fully electric and plug-in hybrid vehicles. The company cited several challenges to the electrification transition, such as the slower-than-expected rollout of charging infrastructure, the withdrawal of government incentives in some regions, and the impact of recent tariffs on electric vehicles in various markets. Originally announced in 2021, Volvo’s goal was to phase out all internal combustion engine (ICE) models, including hybrids, by 2030 and offer only fully electric cars across its global portfolio. However, the new target is for 90% to 100% of its global sales to be “electrified cars,” which will include both fully electric and plug-in hybrid models, with the remaining 10% consisting of mild hybrids. This is a more flexible approach that adapts to different EV adoption rates in different markets and customer demands. The company also revised its short-term goals for reducing carbon emissions. Previously, Volvo aimed to reduce CO2 emissions per vehicle by 75% by 2030, based on 2018. The revised target has now been changed from 65 to 75 percent reduction by 2030. Similarly, the 2025 target has been changed from 40 percent reduction to 30 to 35 percent. Despite these adjustments, Volvo Cars remains committed to achieving net-zero greenhouse gas emissions by 2040. As of the second quarter of 2024, fully electric vehicles accounted for 26% of Volvo’s total sales, while the combined share of electric vehicles (EVs) and plug-in hybrids was 48%. Volvo now anticipates that 50% to 60% of its global sales will consist of electrified products by 2025, a revision from its earlier goal of reaching 50% fully electric sales by that year.
The company still expects to have a complete lineup of fully electric cars well before the end of the decade, allowing for flexibility in achieving full electrification when market conditions are favorable. Volvo’s CEO, Jim Rowan, underscored the company’s dedication to an electric future, stating that electric vehicles provide a superior driving experience and enhance the potential for advanced technologies that benefit customers. However, he admitted that the road to electrification is not easy due to the different speeds of markets and consumers. He praised Volvo for being light and flexible while maintaining its position on power and sustainability.