Retreating Electric Cars... Volvo Withdraws '100% Transition by 2030' Goal

Over 90% Hybrid and Electric Vehicles
Impact of Subsidy Reduction and Tariffs

Bloomberg and other media reported on the 4th (local time) that Volvo Cars has withdrawn its goal of fully transitioning to electric vehicles by 2030 due to a decline in electric vehicle demand.

Volvo Cars announced that plug-in hybrid electric vehicles (PHEVs) and pure electric vehicles will account for more than 90% of sales by 2030. This marks a retreat from the previous goal of selling only 100% electric vehicles.

Volvo stated that the rollout of electric vehicles has been slower than expected due to delays in building charging infrastructure, withdrawal of government support in some markets, and increased uncertainty caused by tariff impositions.

Jim Rowan, CEO of Volvo, said, "We firmly believe that our future is electric. However, the transition to electric vehicles will not be linear, and it is clear that customers and markets are moving at different adoption speeds."

Recently, European countries such as Germany and Sweden have stopped or reduced electric vehicle subsidies, leading to a decrease in electric vehicle demand within Europe. As a result, major European companies like Mercedes-Benz Group and Volkswagen have scaled back their electric vehicle targets. In particular, Volkswagen announced plans to close a factory in Germany for the first time since its founding and to undertake restructuring to reduce costs, leading to conflicts with labor unions.

Additionally, trade tensions between the West and China have had an impact. The United States, European Union (EU), Canada, and others recently announced tariffs of up to 100% on electric vehicles produced in China.

Volvo is owned by China's Geely Automobile and produces electric vehicles in China. Due to the EU tariffs imposed in July, it slightly lowered its vehicle sales forecast for this year. It also postponed the U.S. launch of the EX30 sport utility vehicle (SUV) to next year and has begun job cuts in Sweden to reduce costs.

According to HSBC, electric vehicle sales in Germany from January to July this year are expected to decrease by 20% compared to the previous year. Looking at the entire European market, the electric vehicle adoption rate is projected to increase only slightly from 14.5% last year to 14.8% this year.

However, Volvo stated that the retreat from the electric vehicle goal will not affect investments in fully electric vehicles. To expand future sales, it is focusing on its flagship electric SUV, the EX90, and recently began delivering products to retailers in the United States and Europe.