Volvo abandons pledge to sell only electric cars

The Swedish car marque, renowned for its environmental commitment, has scrapped plans to sell only fully electric cars by 2030 in the latest sign of a global slowdown in growth for battery-powered vehicles.

Volvo has readjusted its commitments to electric vehicles.

Volvo, the Swedish car marque renowned for its environmental commitment, has scrapped plans to sell only fully electric cars by 2030 in the latest sign of a global slowdown in growth for battery-powered vehicles.

Another of Europe’s leading carmakers, Germany’s Volkswagen, has indicated that it could shed thousands of jobs because of expected lower demand in a market disrupted by political and regulatory diktats on zero-emission vehicles.

Volvo, owned by Geely of China, has been in the vanguard of the electric revolution, stating as long ago as 2017 that by the middle of the current decade it would be building only all-electric or petrol-electric hybrids. In 2021 it went further, stating that it would be electric-only by 2030.

However, in a statement yesterday (Wednesday) it readjusted its commitments. It said that by 2030 it expected at least 90 per cent of its production to be either all-electric or plug-in hybrid. The remaining vehicles would be what it called “mild hybrids”, essentially petrol cars with energy-saving devices.

The decision, a U-turn by Volvo, was made by Jim Rowan, the Scot who is chief executive and who joined the company from the technology and consumer electronics industry in 2022. He was previously chief executive of Sir James Dyson’s consumer goods empire.

The Volvo emblem is seen on the front bumper of a vehicl in Austin, Texas. Volvo has cancelled plans to sell fully electric vehicles exclusively, stating that the company may need to hold onto its hybrid models as the transition to electric vehicles continues to develop.

“We are resolute in our belief that our future is electric,” said Rowan, 59. “However, it is clear that the transition to electrification will not be linear and customers and markets are moving at different speeds of adoption.”

The latest jolts to the electric car revolution come amid growing consumer resistance to being forced into more expensive zero emission vehicles at a time of heightened inflation and interest rates and when public recharging networks are far from mature.

In Germany, the largest motoring market on the continent, electric car sales have plummeted since financial incentives were withdrawn. In Britain, the second largest zero emission vehicle market in Europe, electric car sales have stalled as a proportion of all new registrations.

The growing uncertainty about the take-up of electric vehicles was also behind the announcement from Volkswagen, Europe’s largest carmaker, that it will have to “resize” over the next couple of years in the face of falling consumer demand.

In meetings with worker representatives, Arno Antlitz, the finance director, said the outlook for VW, which had been increasing its drive into the electric car market, has changed and that the carmaker expects to produce far fewer vehicles than projected. “We are short of the sales of around 500,000 cars, the sales for around two plants,” said Antlitz from the company’s headquarters in Wolfsburg.

“That has nothing to do with our products or poor sales performance. The market is simply no longer there. We still have a year, maybe two, to turn things around. But we have to use this time. For some time now, we have been spending more money on the brand than we are earning. That doesn’t work in the long term.”

THE TIMES