Volvo Wants Electric Cars to Make Up 50 Percent of its Sales by 2025
But can the Swedish automaker pull that off?
Following the declaration that every car it makes will get a mild hybrid, plug-in hybrid, or all-electric variant beginning in 2019, Volvo now says that all-electric cars will make up 50 percent of its sales by 2025. That's an ambitious target for an automaker that doesn't have any all-electric cars in its lineup right now.
Volvo made the announcement at the 2018 Beijing Auto Show, and the plan seems to be geared toward the Chinese market. China will introduce an emissions-credit system in 2019 that will require automakers to sell specific amounts of electric cars. In a press release, Volvo noted that the Chinese government wants so-called "new energy vehicles" (including battery-electric cars, plug-in hybrids, and hydrogen fuel-cell vehicles) to account for 20 percent of the country's annual car sales by 2025.
Emissions standards in the United States will also get stricter over the next few years but, given the uncertain fate of standards for 2022-2025, the lack of a comprehensive U.S. government plan to promote electric cars, and the larger size of the Chinese new-car market, China is likely Volvo's priority.
But what electric cars will Volvo sell to meet its target? While the Swedish automaker has plenty of plug-in hybrids in its lineup right now, it lacks an all-electric model. Volvo said last year that it will launch five electric cars between 2019 and 2021, but it will have to ramp up production fairly quickly and convince customers to buy these cars instead of its internal-combustion or hybrid models.
Convincing customers to go electric will be as crucial to the plan as building the cars themselves. During a roundtable at the 2018 Geneva Motor Show, Volvo CEO Håkan Samuelsson told The Drive that half of the company's models will be all-electric by 2024, but admitted that "ultimately it’s the customer that will decide," to actually buy them.
Tesla has its issues, but it has the advantage of not having to compete with itself by selling electric cars alongside internal-combustion models. Volvo and other legacy automakers are throwing considerable resources at electric cars, but they'll have to ensure that customers choose those electric cars over the gasoline or diesel alternatives sitting in the same showroom.