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Volvo Cars has abandoned its ambitious target to sell only electric cars by 2030 amid a global fall in demand for battery-powered vehicles.
The Geely-owned Swedish group had been the first among traditional carmakers to pledge a complete switch to electric, and remains the most bullish about the transition even as rivals including Ford and General Motors have also walked back on their EV targets.
Jim Rowan, Volvo’s chief executive, on Wednesday blamed changing market conditions and consumer worries over the lack of charging infrastructure for its revised target.
“We will be ready to go fully electric this decade,” Rowan said as he showcased Volvo’s new fully electric sport utility vehicle.
But he added that the “complex transition” was likely to take a few more years: “Customers and markets are moving at different speeds.”
Under its revised target, Volvo will now aim to turn 90 to 100 per cent of its global sales to electrified vehicles, which also includes plug-in hybrids — a segment Volvo said it would continue to invest in amid growing consumer demand.
Sales of EVs have slowed globally mainly owing to a lack of affordable offerings with battery-powered cars costing about 20 to 30 per cent higher than internal combustion vehicles. The declines in sales growth have been particularly acute in Europe, where Germany and other countries have abruptly ended subsidies for EV purchases.
Analysts at HSBC expect penetration of battery-powered EVs in Germany to decline slightly from last year to 15 per cent with sales down 20 per cent during the January to July period. For Europe, it expects EV penetration of 14.8 per cent in 2024, compared with 14.5 per cent last year.
Analysts have also warned that higher tariffs in the US and Europe on Chinese EV imports will probably keep prices high since companies will be forced to produce vehicles in higher-cost plants outside of China.
Volvo already has plants in China, Sweden and Belgium, and is constructing a new factory in Slovakia. But in the wake of rising protectionism, the company said it would produce its EX30 EV model in its Ghent plant as well as in China from next year.
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