Volvo Car Backtracks on EV Target as Challenges Pile Up — 2nd Update

By Mauro Orru

Volvo Car abandoned a target to sell only fully electric cars by the end of the decade, saying it might need to keep some hybrid models in its portfolio as the market faces an increasingly bumpy transition to electric vehicles.

The Swedish auto maker said it was aiming for 90% to 100% of its global sales by the end of the decade to come from electrified cars--a mix of fully electric cars as well as plug-in hybrid models--leaving a potential 10% gap to sell a limited number of mild hybrid models if needed.

The company, owned by China's Geely Automobile Holdings, said in 2021 that it planned to only sell fully electric cars and phase out cars with internal combustion engines, including hybrids, by 2030.

The decision to ditch that target comes as the EV market is slowing amid a host of challenges, ranging from the imposition of tariffs and the withdrawal of government incentives in some countries to a slower-than-expected rollout of charging infrastructure. Meanwhile, European automakers face increasingly stiff competition from Chinese rivals' aggressive pricing strategies.

Volvo Car's announcement comes two days after rival Volkswagen said it couldn't rule out shutting down vehicle production and component factories in Germany to cut costs amid tight competition and a slowing EV market.

"It is clear that the transition to electrification will not be linear, and customers and markets are moving at different speeds of adoption," Volvo Car Chief Executive Jim Rowan said in a statement.

Volvo Car counts five fully electric models in its portfolio--the EX40, the EC40, the EX30, the EM90 and the EX90--and has another five in development. The group said its long-term aim remains to become a fully electric car company and reach net zero greenhouse gas emissions by 2040.

However the group cut its CO2 reduction targets for the short term: The company is now aiming for a 30% to 35% reduction in emissions per car in 2025 compared with 2018, below a previous target of a 40% reduction. Meanwhile, emissions by 2030 are expected to fall by 65% to 75% compared to 2018, below a firm target of a 75% reduction previously.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

September 04, 2024 11:14 ET (15:14 GMT)

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