Swedish automaker Volvo Cars (OTCPK: VLVCY) has scrapped its plans to offer only electric vehicles by 2030, the company said on Wednesday, citing waning customer demand for EVs and changing market conditions.
What Happened: The company is now looking for battery electric vehicles and plug-in hybrids collectively to account for 90 to 100 percent of its global sales volume by 2030. The remaining up to 10% will be mild hybrid vehicles, the company said.
The adjustment to the company's EV production targets is not expected to have any material impact on its capital expenditure plans, the company said, while adding that it is committed to full electrification in the long term.
"We are resolute in our belief that our future is electric," said company CEO Jim Rowan. "However, it is clear that the transition to electrification will not be linear, and customers and markets are moving at different speeds of adoption. We are pragmatic and flexible, while retaining an industry-leading position on electrification and sustainability."
Having a mixed portfolio of electric, plug-in hybrid (PHEV), and mild hybrid vehicles, the company said, serves as a "clear bridge" to full electrification. PHEVs further provide customers the chance to experience electric driving if they are not willing to completely switch to fully electric vehicles, it added.
Why It Matters: The share of fully electric cars in Volvo's portfolio stood at 26% in the second quarter. Together with plug-in hybrids, it accounted for 48%.
Volvo currently has five fully electric vehicle models including the EX40, the EC40, the EX30, the EM90, and the EX90. However, there has been a slower-than-expected rollout of charging infrastructure, withdrawal of government incentives in select markets, and uncertainties created by tariffs imposed on China-made EVs in different markets including Europe and the U.S., it noted.
Volvo is majority-owned by China's Geely (OTC:GELYF) and it has production plants in Chengdu, Daqing, and Taizhou in addition to a research and development center in Shanghai.
The company also called for "stronger and more stable government policies" to support the transition to electrification.
Check out more of Benzinga's Future Of Mobility coverage by following this link.
Read More:
- Uber Rival Lyft To Lay Off 1% Of Employees, Sell Assets To Reduce Costs
Photo courtesy: Volvo