«The euphoria of electrification gripped many automakers several years ago, and the most ambitious of them promised to abandon the production of cars with internal combustion engines, if not by the end of this decade, then at the beginning of the next. Volvo Cars initially promised to go all-electric by 2030, but has now rethought its plan, pushing the deadline beyond 2040.
Image source: Volvo Cars
The previous plan to switch to exclusively producing electric vehicles was adopted by the Swedish brand, owned by the Chinese concern Geely, three years ago. For some time, sales volumes of electric vehicles really grew rapidly, but the market quickly became saturated, and in difficult times from the point of view of the macroeconomic situation, there were significantly fewer people willing to buy not the cheapest vehicles of this type. In fact, Volvo now promises only to achieve “carbon neutrality” by 2040, and this will not prevent it from selling cars with internal combustion engines even after this period, even in a hybrid version. The system of so-called “environmental credits” allows manufacturers to compensate for sales of cars with internal combustion engines by their activity in other areas or by purchasing quotas from competitors, so technically the set goals do not limit Volvo from producing hybrids after 2040.
Volvo attributes the slowdown in demand growth for electric vehicles to a number of factors, including the slow development of charging infrastructure, as well as the end of subsidies for the purchase of electric vehicles by consumers in a number of markets, combined with unfavorable changes in customs policy. However, by 2030, Volvo expects to increase the share of pure electric and plug-in hybrid vehicles to 90 or even 100% of its sales structure. The remaining 10% in the least favorable prognosis will be formed by so-called “soft hybrids” of the sequential type.
Already next year, vehicles with electric traction motors in one configuration or another will form 50 to 60% of Volvo passenger car sales. Now the brand’s product range includes several “purebred” battery electric vehicles – these are the XC40 Recharge, C40 Recharge, EX30 and EX90. Last quarter they accounted for 26% of the Swedish brand’s sales, and in combination with rechargeable hybrids they reached 48%.
Competitors are also reconsidering their attitude to the speed of migration to electric traction. Ford, GM, Mercedes-Benz and Jaguar Land Rover have announced adjustments to their plans to transition to exclusively electric vehicles to slow down the process. Even Tesla, considered the market leader, admitted that its growth rate in sales of electric vehicles will slow down this year.