Volvo Does U-Turn on Target of 100% EVs by 2030

Volvo Cars has scrapped its goal of selling only electric vehicles (EVs) by 2030, as demand for battery-powered vehicles falls.

The Swedish carmaker said it is now aiming for “90 to 100 per cent of its global sales volume by 2030 to consist of electrified cars,” including a combination of EVs and plug-in hybrids, reported Euronews.

Volvo blamed shifting market conditions for changing a target it announced just three years earlier, BBC News reported. The industry has been facing a slowdown and uncertainty caused by trade tariffs imposed on EVs manufactured in China.

Ford and General Motors have also scaled back their EV plans.

Volvo said it may also offer a limited number of “mild hybrids” — more conventional cars that have limited electrical assistance.

“We are resolute in our belief that our future is electric,” said the company’s chief executive Jim Rowan, as reported by BBC News. “However, it is clear that the transition to electrification will not be linear, and customers and markets are moving at different speeds.”

The automaker said factors like delayed charging infrastructure rollout and the removal of consumer incentives had changed the EV business climate.

“Some of the subsidies that governments had put in place to encourage electric car purchases have ended and also there’s just that ongoing lack of demand because consumers are worried about charging,” Anna McDonald, an independent equity analyst, told the BBC’s Today show.

McDonald noted that EVs were still more expensive than traditional cars.

“While the EU and the U.S. are putting tariffs on Chinese cars that are imported to stop them kind of swamping the market, that just means that vehicles have to be made outside China which is more expensive,” McDonald explained. “Car manufacturers are not keen to start making a loss on these vehicles.”

Volvo expects a combination of full EVs and hybrids to make up from 50 to 60 percent of its sales by 2025, Reuters reported. An earlier target of the company was for a minimum of half of their vehicles to be fully electric by next year, with the remainder being made up of hybrid models.

“It’s a pragmatic approach… to help our customers go on the journey to full electrification. For many customers in many markets it will be a stepwise journey,” Erik Severinsson, chief product officer and head of strategy at Volvo, told Reuters.

EV registrations in the European Union fell by almost 11 percent in July, the European Automobile Manufacturers Association said, as reported by BBC News.

Volvo Cars is majority-owned by Geely, a Chinese car manufacturer that uses factories in China, so import tariffs on Chinese-made EVs in North America and Europe will also affect the company.

China has been accused by Western countries of giving its own carmakers an unfair edge by subsidizing its EV industry. However, China has rejected the accusations, calling the tariffs “unilateral” and “discriminatory.”