Swedish automaker Volvo Cars has scrapped its target of going all electric by 2030, saying it now expects to still be offering some hybrid models in its line-up at that time.
Volvo Cars said in a statement on Wednesday that it now aimed for at least 90 per cent of cars sold by the end of the decade to be fully electric or plug-in hybrid models, while up to 10 per cent would be so-called mild hybrids, where electric power only supplements the combustion engine.
The company said its decision came in response to changing market conditions and customer demands.
"We are resolute in our belief that our future is electric," CEO Jim Rowan said.
"However, it is clear that the transition to electrification will not be linear, and customers and markets are moving at different speeds."
Major automakers have seen slowing demand for EVs partly due to a lack of affordable models and the slow roll-out of charging points, while also bracing for the effects of European tariffs on electric cars made in China.
Volvo Cars, which is majority-owned by Chinese conglomerate Geely, sells a mix of electric and hybrid cars, and had until now remained steadfastly committed to its plans to only sell fully electric cars by 2030 even as its rivals began scaling back their ambitions.
Some of Volvo's flagship fully electric cars are the EX90 and the EX30, both SUVs.
The company said in a separate statement that plug-in hybrids would be a critical part of its future profit growth, and that it would revamp its hybrid XC90, with first customers receiving the SUV by the end of the year.
Growing demand for hybrid cars has prompted a strategic shift across a sector that had initially aimed to phase out hybrids in favour of fully electric vehicles.
Concerns about EVs' driving ranges are among the reasons buyers have gravitated towards the often more affordable and convenient hybrids.
By 2025, Volvo Cars now expects electrified cars — both full EVs and hybrids — to account for between 50 per cent and 60 per cent of sales volumes. The previous 2025 target was for at least 50 per cent fully electric cars, with the rest hybrids.
The regulatory push for electric cars is part of efforts to meet goals to reduce greenhouse gas emissions under the 2015 Paris accords aimed at combating climate change.
But the uptake of EVs has hit headwinds. Germany suddenly dropped purchase subsidies at the start of this year, and construction of places to charge away from home have lagged.
In July 2024, registrations of battery-only cars in Europe declined by 10.8 per cent to 102,705 units, with their total market share slipping to 12.1 per cent from 13.5 per cent a year before, according to the European Automobile Manufacturers' Association.
Volvo also cited "uncertainties" around recent new tariffs on electric vehicles made in China.
The US has imposed a new 100 per cent tariff that blocks most Chinese cars, while the European Union has added tariffs of 17.4 per cent to 37.6 per cent, though it is not collecting them as it seeks a trade understanding with China.
Higher tariffs could mean higher prices as cheaper Chinese EVs are kept off consumer markets.
Volvo is the latest car-maker to scale back electric ambitions. Mercedes-Benz said its goal of 50 per cent of its cars having electric motors by 2025 would slip to 2030, while Ford Motor Co. has delayed or dropped electric models and cut back on investments in electric production and technology.
Toyota and Renault have continued to bet strongly on hybrids instead of EVs.
Reuters/AP