Volvo To Produce Only Electric Cars By 2030

Volvo announced on Tuesday that it is phasing out the production of all cars with internal combustion engines (including hybrids), and will make only electric vehicles by 2030.

The Swedish carmaker also said it would only sell its electric cars direct to consumers online, in a blow to the traditional model of selling vehicles via independent dealerships. However, Volvo also said that, while its all-electric vehicles will be sold exclusively online, dealerships will “remain a crucial part of the customer experience and will continue to be responsible for a variety of important services such as selling, preparing, delivering, and servicing cars.”

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As part of the announcement Tuesday, the Swedish automaker will unveil its second fully electric car, a follow-up to last year's XC40 Recharge, a compact SUV. Volvo said its goal is to have half of its global sales be fully electric cars by 2025, with the remaining half made up of hybrids.

“I am totally convinced there will be no customers who really want to stay with a petrol engine,” Volvo Chief Executive Håkan Samuelsson told reporters when asked about future demand for electric vehicles. “We are convinced that an electric car is more attractive for customers.”

Volvo’s move follows rivals including Jaguar Land Rover, General Motors Co., and Volkswagen AG announcing plans to electrify their offerings. In addition to tough emissions regulation, incredible valuations garnered by EV-only newcomers have been a wake-up call to accelerate the pace of change to survive industry upheaval.

Samuelsson said Volvo will include wireless upgrades and fixes for its new electric models — an approach pioneered by electric carmaker Tesla Inc., and that it will “radically reduce” the complexity of its model line-up and provide customers with transparent pricing.

Volvo will not be investing in cars with hydrogen fuel cells, as it does not think there will be enough demand from customers. There is also a question mark over hydrogen's availability in comparison with charging points for electric cars, a spokesman said.

So far Volvo has not been affected by a pandemic-fueled global semiconductor chip shortage that has shuttered a growing number of assembly plants, which Samuelsson said was thanks to constant communication with suppliers.

“So far, knock on wood, we have not had to stop any assembly line,” he said. “But it could happen any day.”