Volvo Cars is resolutely moving forward with its electrification strategy, underscoring its commitment to becoming a leader in the electric vehicle (EV) market. With five fully electric models already available and another five in active development, Volvo’s dedication to full electrification remains a cornerstone of its product roadmap. The company’s overarching ambition is to transition into a fully electric car manufacturer, aligning with its broader goal of achieving net-zero greenhouse gas emissions by 2040.
However, acknowledging the dynamic nature of the global automotive landscape, Volvo Cars has announced a strategic adjustment to its immediate electrification targets. This decision reflects a keen awareness of evolving market conditions and shifting consumer demands within the burgeoning EV sector.
Moving forward, Volvo Cars is setting its sights on a global sales volume where 90 to 100 percent of its vehicles will be electrified by 2030. This encompasses a strategic blend of both fully electric cars and plug-in hybrid models – essentially, every car in their lineup equipped with a charging cord. This revised ambition allows for a small margin of 0-10 percent for mild hybrid models, if market demands necessitate. This updated approach refines the company’s previous, more absolute goal of achieving a fully electric vehicle lineup by 2030.
Looking ahead to 2025, Volvo anticipates that electrified vehicles will constitute between 50 and 60 percent of its total product offerings. Significantly, Volvo Cars is on track to present a complete range of fully electric cars well before the close of this decade. This strategic timeline provides Volvo with the agility to transition to complete electrification precisely when market conditions are optimally conducive.
Volvo Cars’ current standing in the electric vehicle market is robust. In the second quarter of 2024, fully electric cars accounted for an impressive 26 percent of Volvo’s sales – the highest proportion among its premium automotive peers. Furthermore, when considering both fully electric and plug-in hybrid vehicles, Volvo’s electrified share reached a notable 48 percent.
Despite adjustments to its short-term targets, Volvo Cars unequivocally reaffirms its enduring commitment to full electrification. The company’s long-term investment strategy and product development roadmap remain firmly oriented towards fully electric vehicles. The recent strategic recalibration is not anticipated to have any significant impact on Volvo’s planned capital expenditures, signaling continued investment in its electric future.
Volvo Cars is strategically maintaining a balanced portfolio by continuing the development of its plug-in and mild hybrid vehicles. This diversified approach serves as a crucial and practical bridge, facilitating a smoother transition towards an all-electric automotive future for consumers.
Since Volvo publicly announced its ambition to go fully electric, the company has successfully launched five distinct fully electric models: the Volvo EX40, Volvo EC40, Volvo EX30, Volvo EM90, and the Volvo EX90. Notably, the Volvo EX30 has rapidly gained market traction, currently holding the position as the third best-selling EV in Europe, according to the latest industry data.
However, the path to full electrification is not without its challenges. Volvo recognizes that the rollout of charging infrastructure has been slower than initially projected. Furthermore, the withdrawal of government incentives in certain key markets and the emergence of new uncertainties due to tariffs on EVs in various regions present additional complexities. Considering these factors, Volvo Cars emphasizes the ongoing need for stronger and more consistent government policies to effectively support and accelerate the broader transition to vehicle electrification.
These strategic adjustments to Volvo’s electrification ambitions are designed to ensure the company maintains a flexible and responsive plan. This adaptability allows Volvo Cars to effectively meet evolving customer preferences while simultaneously ensuring sustained value creation within its business model.
“We are resolute in our belief that our future is electric,” stated Jim Rowan, chief executive of Volvo Cars. “An electric car delivers a superior driving experience and unlocks enhanced possibilities for integrating advanced technologies that elevate the overall customer experience. However, it is also evident that the transition to electrification will not be a linear progression. Customer adoption rates and market dynamics are evolving at varying speeds. Our approach is to be pragmatic and flexible, while steadfastly maintaining our industry-leading position in electrification and sustainability.”
Updated Carbon Emission Reduction Strategy
In conjunction with its refined electrification ambitions, Volvo Cars is also updating its carbon dioxide (CO2) emission reduction targets, which remain ambitious within the automotive sector. By 2030, the company now aims to achieve a reduction in CO2 emissions per car by 65-75 percent compared to a 2018 baseline. This represents a slight adjustment from the previously stated goal of a 75 percent reduction.
For the nearer term, by 2025, Volvo is targeting a 30-35 percent reduction in CO2 emissions versus the 2018 benchmark. This also reflects a recalibration from the prior 40 percent reduction target.
Volvo Cars is committed to continuous progress in sustainability. This includes proactive collaboration with its suppliers to further diminish CO2 emissions originating from materials across the company’s entire value chain.
In the first half of the current year, Volvo Cars has already demonstrated tangible progress, achieving a 25 percent reduction in CO2 emissions per car compared to its 2018 benchmark.
Continued Momentum and Progress
The compact Volvo EX30 SUV continues to demonstrate strong market performance, and initial customer deliveries of the fully electric Volvo EX90 flagship model are commencing this month. This momentum underscores the growing excitement surrounding Volvo Cars’ expanding portfolio of fully electric vehicles. The EX90, in particular, represents a significant technological leap forward, poised to usher in a new era for Volvo Cars.
Volvo Cars has also witnessed increasing consumer interest in its plug-in hybrid models. The Volvo XC60, for example, has emerged as the best-selling plug-in hybrid model in Europe this year, according to industry data. Plug-in hybrids offer a compelling pathway for customers to experience electric driving, particularly for those who are not yet fully prepared or positioned to transition to fully electric vehicles.
Data collected by Volvo Cars indicates that a significant proportion of its plug-in hybrid customers are already maximizing electric driving. Recent data reveals that approximately half of the kilometers driven by the latest plug-in hybrid Volvo cars are powered solely by electricity. Volvo Cars is dedicated to further enhancing its plug-in hybrid technology, with ongoing efforts focused on increasing electric driving range, optimizing electric usage, and continuously improving the overall customer experience.
Further details regarding Volvo Cars’ strategic direction, investment plans, and product roadmap will be presented at Volvo Cars’ upcoming 90/90 Event and Capital Markets Day, scheduled for today and tomorrow in Gothenburg, Sweden.
The Fine Print
- Volvo Cars’ CO2 emission reduction ambition encompasses all emissions within the Volvo Cars global greenhouse gases (GHG) protocol, with the exception of the subcategory “Production and distribution of fuel and electricity” within “Use of sold products.”
Volvo Cars in 2023
For the full year 2023, Volvo Car Group reported a record-breaking core operating profit of SEK 25.6 billion. Revenue for 2023 reached an all-time high of SEK 399.3 billion, and global sales achieved a record volume of 708,716 cars.
About Volvo Car Group
Founded in 1927, Volvo Cars has grown into one of the world’s most recognized and respected automotive brands, with sales to customers spanning over 100 countries. Volvo Cars is publicly listed on the Nasdaq Stockholm exchange under the ticker symbol “VOLCAR B”.
Volvo Cars’ overarching purpose, “For life. To give people the freedom to move in a personal, sustainable and safe way,” is deeply embedded in its ambition to become a fully electric car manufacturer. This purpose is further reflected in the company’s unwavering commitment to continuously reducing its carbon footprint, with the ultimate ambition of achieving net-zero greenhouse gas emissions by 2040.
As of December 2023, Volvo Cars employed approximately 43,400 full-time professionals. Volvo Cars’ global headquarters, along with its core product development, marketing, and administration functions, are primarily located in Gothenburg, Sweden. The company operates production facilities in Gothenburg, Ghent (Belgium), South Carolina (US), Chengdu, Daqing, and Taizhou (China). Volvo Cars also maintains dedicated R&D and design centers in Gothenburg and Shanghai (China).
For further information, please contact:
Volvo Cars Media Relations
+46 31-59 65 25
[email protected]
Volvo Cars Investor Relations
+46 31-793 94 00
[email protected]
This disclosure contains information that Volvo Car AB (publ) is obligated to make public under the EU Market Abuse Regulation (EU nr 596/2014). The information was released for publication through the contact person’s agency at 13:46 CET on 04-09-2024.
