(Bloomberg) -- Volvo Car AB abandoned a target to sell only fully electric vehicles by the end of this decade, joining several peers in walking back its EV ambitions due to waning demand.
The Chinese-owned automaker now aims for plug-in hybrid and battery-only models to account for at least 90% of its sales in 2030. The remainder will be mild hybrids that rely mostly on combustion engines, Volvo said Wednesday.
Demand for electric cars is cooling in Europe after countries including Germany and Sweden ceased or pared back subsidies. That’s prompted manufacturers including Mercedes-Benz Group AG and Volkswagen AG to lower their EV ambitions, with the latter mulling factory closures to cut costs.
Geely-owned Volvo Car has also been caught in the crossfire of trade conflicts with Beijing over EV subsidies. The company makes electric models in China that are poised to be hit by tariffs levied by the US and the European Union.
In July, Volvo slightly lowered its vehicle-sales forecast for this year, due to the EU duties. In June, the company postponed US shipments of the EX30 sport utility vehicle to next year, after Washington announced plans to impose a tariff of more than 100% on Chinese EV imports. It’s also been cutting jobs in Sweden to reduce costs.
Volvo also warned it may pollute more due to the changed targets, saying it aims to reduce carbon dioxide emissions per car by 65% to 75% by 2030, compared to an earlier target for a 75% reduction.
The changes won’t affect the company’s investments in fully electric cars, a spokesperson said. Volvo executives are scheduled to update reporters and investors about strategy and products at events on Wednesday and Thursday in Gothenburg, Sweden.
Volvo is betting on its flagship electric SUV, the EX90, to bolster demand in the coming months. The company has started shipping the model to retailers in the US and Europe, with first customers expected to get their cars before the end of this month.
“We are resolute in our belief that our future is electric,” Chief Executive Officer Jim Rowan said in a statement. “However, it is clear that the transition to electrification will not be linear, and customers and markets are moving at different speeds of adoption.”
--With assistance from Craig Trudell.
(Updates with adjusted emissions targets in sixth paragraph.)
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