By the end of the decade, the only Volvo you can buy will be electric and it can be bought online only.
The Chinese-owned carmaker announced plans on Tuesday to refrain from selling cars that run on fossil fuels by 2030, part of a growing craze within the industry to respond to pressure for handling the climate crisis. It also declared that its new electric vehicles could only be sold online.
The Swedish brand said that as part of the transformation, it wishes half of its sales in 2025 to be electric cars and the other half hybrids. That suggests it will stop selling vehicles equipped only with gasoline or diesel within four years from now.
The targets are expansionist for any organization that has only brought one fully electric vehicle, the XC40 Recharge, to market. But they show a growing consensus that carmakers cannot postpone the switch to electric vehicles without losing customers and annoying regulators.
According to Volvo chief technology officer Henrik Green, there is no long-term future for cars with an internal combustion engine. The transition to selling exclusively electric cars will let Volvo meet the expectations of our customers and be a part of the solution when it comes to combating climate change.
The automaker said that its second fully electric car, a new model in the 40 Series, will be revealed later on Tuesday. Many other electric models will be launched in the coming years.
Volvo will invest heavily in online sales and completely reduce the complexity of its product offerings. Pricing will be transparent. The strategy is the same as the one used by electric car market leader Tesla, which only sells online.
The announcements come less than a week after Volvo’s owner, Geely (GELYF), dismissed plans to unify the carmakers. China’s biggest independent automaker said the two companies will keep their independent corporate structures, though they will collaborate on electric and autonomous driving technology.
Other carmakers have disclosed plans in recent months to quickly transform into electric vehicles. Ford (F) said in February that it is intended to sell only electric passenger cars in Europe by 2030. General Motors (GM) recently announced it is targeting to sell exclusively emission-free vehicles by 2035.
Much of the action is taking place in Volvo’s home market. Europe has imposed aggressive targets to lessen greenhouse gas emissions from vehicles, and carmakers face huge potential fines if they do not comply. That has helped the continent move ahead of the United States on the adoption of electric vehicles.
German automaker Volkswagen (VLKAF), which announced a joint venture with Ford in 2019, is the leader in electric vehicle sales in Europe. Tesla (TSLA) is building its first European factory outside of Berlin, which is due to start later this year.
Electric vehicles may be cheaper to produce than traditional gasoline-powered cars, due to lesser moving parts and thus less need for labour to assemble them.