Volvo Cars Announces it Will Only Offer Fully-Electric Vehicles by 2030
In a bold move, Swedish automaker Volvo Cars announced on Tuesday that it will transition to fully-electric vehicles by 2030. The company will electrify its entire model lineup, replacing all of its internal combustion engine models by then.
In the interim, Volvo aims for hybrid models to make up 50% of its offering by 2025, but eventually the automaker's hybrid models will be replaced by fully-electric vehicles by Volvo's 2030 timeline.
Volvo's transition towards becoming a fully electric car company is part of its ambitious plan to address climate change, buts it's also a way for the company to adapt to a changing auto industry.
"There is no long-term future for cars with an internal combustion engine," said Henrik Green, Volvo's chief technology officer. "We are firmly committed to becoming an electric-only car maker and the transition should happen by 2030. It will allow us to meet the expectations of our customers and be a part of the solution when it comes to fighting climate change."
Volvo's announcement to go all-electric comes as Tesla Inc. has risen to become the world's most valuable car company with a market cap of roughly $675 billion. Tesla's position as the world's most valuable automaker has prompted automakers around the world to electrify their model lineups or risk losing market share to rivals offering more environmentally-friendly, zero-emissions vehicles.
Volvo said its committed to becoming a leader in the fast-growing premium electric car market, meaning that its future electric models will compete directly with Tesla. For the past decade Tesla faced little competition in the premium electric vehicle category, now that advantage is slowly evaporating as the world's automakers electrify their models.
The Cailiforna electric manufacturer also disrupted the auto industry with its fully-electric vehicles that support over-the-air software updates. Tesla was also the first automaker to sell its vehicle directly to consumers without using a traditional network of dealers. This new business model however is catching on in the auto industry.
"To remain successful, we need profitable growth. So instead of investing in a shrinking business, we choose to invest in the future – electric and online," said Håkan Samuelsson, chief executive. "We are fully focused on becoming a leader in the fast-growing premium electric segment."
Volvo said its decision is based on the expectation that future legislation will require automakers to further reduce emissions from their fleets, especially in Europe. In addition, Volvo expects that the rollout of EV charging infrastructure will accelerate consumer acceptance of fully electric cars.
The lack of convenient charging options is one of the main factors in getting drivers to switch to fully-electric vehicles.
In addition to building only electric vehicles, Volvo plans to restructure its traditional dealership sales models. The company will increase its focus on online sales, making the process more transparent for the consumer. Volvo says its future fully electric models will be available online only, with transparent pricing.
The 2030 ambition represents an acceleration of Volvo Cars' electrification strategy, driven by strong demand for its electrified cars and the belief that the market for combustion engine cars is a shrinking one in the long term.
U.S automaker General Motors has also recently made the commitment to switch to electric vehicles. In January, the company announced plans to phase out internal combustion engine models from its entire lineup of passenger vehicles, including light-duty trucks and SUVs by 2035.
Volvo launched its first fully electric car, the XC40 Recharge SUV, in markets around the globe last year.
In additon to Volvo's electrification plans, the company also revealed on Tuesday its second fully-electric car, a new model called the C40 Recharge. The C40 Recharge will go into production this fall and will be built alongside the XC40 Recharge at the Volvo Cars manufacturing plant in Ghent, Belgium.
With the new C40 Recharge, Volvo's switch to electric cars has already begun.
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