Volvo has revised its goal of producing only fully electric cars by 2030, now planning to sell some hybrid vehicles as well. The automaker cited evolving market conditions as the reason for stepping back from its earlier commitment, made just three years ago. This shift comes amid declining demand for electric vehicles (EVs) in major markets and uncertainty caused by tariffs on Chinese-made EVs.
While Volvo, known for its environmental focus, is joining other automakers like General Motors and Ford in scaling back its EV targets, the company still expects at least 90% of its production to consist of electric and plug-in hybrid vehicles by 2030. It may also offer a limited number of mild hybrids, which are traditional vehicles with partial electric assistance.
Volvo’s CEO, Jim Rowan, reaffirmed the company’s belief in an electric future but acknowledged that the shift to electrification is uneven across regions. Market challenges, including slow expansion of charging infrastructure and reduced consumer incentives, have contributed to this change in strategy.
Independent equity analyst Anna McDonald pointed out that consumers remain hesitant about switching to EVs due to concerns about charging availability and the higher cost of electric cars. Government subsidies that once encouraged EV purchases have been rolled back, and tariffs on Chinese-made EVs are raising production costs. Car manufacturers are wary of absorbing losses in this climate, McDonald added.
In July, EV registrations across the EU fell by nearly 11%, highlighting the industry’s struggles. Volvo, majority-owned by China’s Geely, is also impacted by the tariffs on Chinese-made EVs in Europe and North America. Canada recently imposed a 100% tariff on Chinese EV imports, following similar actions by the U.S. and EU, amid accusations that China unfairly subsidizes its EV industry.
Ford and General Motors have also scaled back their EV goals, with Ford scrapping plans for an all-electric SUV and delaying the launch of its next electric pickup, while General Motors has reduced its EV production targets over the past year.
