Three years after saying it would sell only electric vehicles by 2030, Volvo has scaled back its EV ambitions. The automaker now says it will aim for 90 to 100 percent electrified vehicles (including full EVs and plug-in hybrids) by the end of the decade, while the remaining 0 to 10 percent will be mild hybrids. Volvo attributed its revised ambitions to “changing market conditions and customer demands.”
Volvo says it is still committed to long-term electrification. The automaker has launched five fully electric models since setting its (now canceled) 2030 goal three years ago: the EX40, EC40, EX30, EM90 and EX90.
The company cites a slower-than-expected rollout of EV charging infrastructure as a factor in its decision. Despite the passage of President Biden’s bipartisan infrastructure legislation in 2021, which allocated $7.5 billion to support the construction of 500,000 EV charging stations, only seven stations had been built in four states as of March. Reasons for the slow rollout reportedly include a lack of experience in state transportation agencies in charge of execution and the various government requirements (submitting plans, inviting bids, providing funding).
Earlier this year the Biden administration said it still expected the U.S. to reach 500,000 charging stations by 2026.
Volvo also cited “additional uncertainties created by recently imposed tariffs on EVs in various markets.” This likely refers to the losses the automaker faces from building some models in China.
Earlier this year, the White House announced new tariffs on EVs made in China and batteries sourced from China. (Volvo’s parent company, Volvo Car AB, is majority-owned by China’s Geely Holding.) Forbes reported in May that the China-built EX30, which is expected to start at around $37,000, will cost more than $50,000 after the tariffs.
The automaker adjusted its CO2 reduction expectations along with the revised timeline. It now says it aims for a 65 to 75 percent reduction in emissions per car by 2030 (compared to a 2018 baseline); its previous goal was 75 percent. In addition, it also changed its goal to a 40 percent reduction in emissions per car by 2025 (also compared to 2018); the goal is now a 30 to 35 percent reduction.
“We remain firm in our belief that our future is electric,” Volvo Cars CEO Jim Rowan wrote in a press release. “An electric car provides a better driving experience and increases the possibilities to use 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 maintaining a leading position in the industry on electrification and sustainability.”