Volvo drops plan to go fully electric by 2030, hybrids to remain

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LOS ANGELES - Volvo announced on Wednesday that it has reversed its goal of producing only electric vehicles (EVs) by 2030, acknowledging that hybrids will remain part of its lineup. The Swedish automaker, which is backed by China’s Geely, originally aimed to go fully electric but is now adapting to market conditions where demand for EVs is slowing.

The company now expects that 90% to 100% of its global sales in 2030 will consist of fully electric vehicles or plug-in hybrids, leaving the door open for up to 10% of mild hybrid models. This adjustment reflects changing consumer preferences, with many drivers opting for hybrids or gas-powered cars due to affordability concerns and limited access to charging infrastructure.

Why is Volvo making this change?

Volvo’s decision comes at a time when consumers are hesitant to fully embrace electric vehicles. Affordability remains a key issue as EVs are typically more expensive than their hybrid or gas-powered counterparts. Another major factor is the availability of charging stations. A recent study by J.D. Power revealed that 52% of car shoppers cited concerns about public charging infrastructure as a reason for their disinterest in EVs—a figure that has grown over the past year.

Volvo’s second-quarter 2024 sales data supports this shift, with 26% of its sales consisting of fully electric vehicles, while hybrids and EVs combined accounted for 48%. By 2025, Volvo expects its electrified lineup to make up between 50% and 60% of its total sales.

The impact of tariffs and market conditions

Another consideration for Volvo is the looming European tariffs on electric cars made in China, where Volvo manufactures a portion of its vehicles.

The U.S. has already implemented similar measures, and Europe’s move could impact the cost-effectiveness of selling EVs produced in China. These factors, combined with fluctuating demand, have contributed to Volvo’s decision to maintain some hybrid models in its lineup.

Despite these adjustments, Volvo remains committed to electrification. "We are absolute in our belief that our future is electric," said Volvo CEO Jim Rowan. He acknowledged that the transition will not be linear, and different markets and consumers are moving at varying speeds when it comes to EV adoption.