Volvo plans to promote solely electrical vehicles by 2030 within the newest transfer by a legacy carmaker to abandon fossil fuels that contribute to international heating.
The Swedish carmaker additionally stated it could solely promote its electrical vehicles direct to customers on-line, in a blow to the normal mannequin of promoting automobiles by way of unbiased dealerships.
Volvo had beforehand stated it needed half of its gross sales to be electrical by 2025, however stated on Tuesday its new technique – which places it in step with the UK’s 2030 ban on inner combustion engine gross sales – was an “acceleration” of plans to part out inner combustion engine gross sales fully.
Håkan Samuelsson, the Volvo chief government, stated the corporate didn’t need to be caught concentrating on a shrinking market for petrol and diesel cars.
“To stay profitable, we want worthwhile development,” he stated. “So as an alternative of investing in a shrinking enterprise, we select to take a position sooner or later – electrical and on-line. We’re absolutely targeted on changing into a pacesetter within the fast-growing premium electrical phase.”
Volvo final yr launched its first absolutely electrical automotive, the XC40 Recharge, and it’ll unveil a brand new electrical 40 Sequence on Tuesday. Nevertheless, its higher-margin premium vehicles allowed it to be among the many extra superior European legacy carmakers within the transition away from fossil fuels, together with the launch of its Polestar all-electric brand to rival US electrical automotive pioneer Tesla. Volvo additionally sells a number of plug-in hybrid electrical automobiles.
Its electrified portfolio meant that Volvo simply achieved EU-mandated emissions targets in 2020. That allowed it to promote emissions credit to Ford for an undisclosed sum, serving to the US carmaker keep away from steep fines.
“There isn’t any long-term future for vehicles with an inner combustion engine,” stated Henrik Inexperienced, the Volvo chief expertise officer. “We’re firmly dedicated to changing into an electric-only carmaker and the transition ought to occur by 2030. It can permit us to satisfy the expectations of our prospects and be part of the answer in the case of preventing local weather change.”
The corporate recorded its finest ever earnings within the second half of 2020 because the Chinese language market rebounded from the autumn in gross sales on the start of the coronavirus pandemic.
Volvo is owned by Geely, a Chinese language conglomerate run by billionaire Li Shufu that additionally owns British sportscar model Lotus and British electrical taxi and van producer LEVC.
Geely, one of many few massive Chinese language carmakers not managed by the state, has sought to develop lately. Volvo and Geely Autos final week scrapped plans to merge their operations, however stated they’d share extra electrical automobile expertise and software program. Many legacy automotive corporations have cast nearer hyperlinks with different manufacturers inside bigger teams and even between opponents with a view to spread the costs of electric vehicle development.
Volvo’s transfer to on-line gross sales is a part of a broader transfer by carmakers to construct direct relationships with prospects – in addition to retaining the margin it has beforehand given to dealerships, a sector beneath important structural strain. The carmaker will goal to bundle linked providers corresponding to insurance coverage, servicing and residential charging.