The carmaker, owned by the Chinese corporation Geely, has abandoned its plan to sell only electric cars. The company is now aiming to at least 90 percent of its sales in 2030 were plug-in hybrid and battery-powered modelsThe remaining part of the sales will be mild hybrids, which rely mainly on combustion enginesVolvo said on Wednesday.
As Bloomberg notes, Volvo’s change in strategy is the result of falling demand for electric cars in Europe, which occurred after Germany and Sweden have stopped or reduced subsidies supporting the electric car sector..
Volvo is not the first
Volvo is not the first manufacturer to change its approach to electric vehicles as a result of the market. The drop in demand has also prompted other companies, such as Mercedes-Benz Group and Volkswagen to lower their electric vehicle ambitions. Volkswagen is even considering closing two factories in Germany to reduce costs.
Trade conflicts with Beijing affect Volvo
Volvo Car, owned by Chinese concern Geely, has found itself in the middle of a trade conflict with Beijing because Volvo’s electric models are manufactured in China and could be hit by tariffs imposed by the US and the European Union.
Due to EU tariffs, in July Volvo slightly lowers vehicle sales forecast for this year. In June, the company postponed deliveries of the EX30 SUV to the US until next year after Washington announced plans to impose tariffs of over 100 percent on Chinese imports of electric vehicles.
To cut costs, Volvo is also cutting jobs in Sweden.
Electrification is still the main goal
A company spokesman said the announced changes would not affect the company’s investments in all-electric cars.
Volvo is banking on its flagship electric SUV, the EX90. To bolster demand in the coming months, the company has begun shipping the model to retailers in the U.S. and Europe. The first customers are expected to receive their cars by the end of this month, Bloomberg reported.
“We are firm in our belief that our future is electric” CEO Jim Rowan said in a statement.
Electric vehicles approach a quarter of Volvo’s total sales / Bloomberg
Volvo Cars lowers profit targets after cutting EV targets
Volvo Car lowered its forecasts as rising tariffs hurt some of the company’s models made in China. The company expects Currently, the return is between 7% and 8% in 2026 on earnings before interest and taxesit said on Thursday ahead of an investor conference.
