- Volvo abandons plans to move to an all-electric car trade by 2030
- The fascination with electric cars is fading
- Electric cars have exploded in popularity and may soon be forgotten
- The number of electric cars in the world is still growing
Volvo abandons plans to move to an all-electric car trade by 2030
The world-famous Swedish car manufacturer Volvo Cars has abandoned its plan to switch to selling only electric cars by 2030. The decision is due to a weakening demand for pure battery cars.
Volvo shares have fallen by more than 4% since the news was announced, and their value has fallen by as much as 12% in the last six months. The company has also recently reported disappointing first-quarter earnings and has given a rather bleak outlook for the remainder of the year.
This has led to a reduction in the ambitions long associated with electric vehicles. Rather than becoming an exclusively electric car maker, Volvo aims for 90-100% of its global sales volume to come from electrified cars by 2030. If needed, the remaining 0-10% will be limited to light hybrid models. By the middle of this decade, Volvo still expects to produce 50-60% electrified cars.
The company notes that 26% of its products are fully electric cars. In the second quarter of this year, its overall share of electrified cars, including electric cars and plug-in hybrids, was 48%.
The fascination with electric cars is fading
Experts in the automotive and electric vehicle market note that there is currently a growing global demand for hybrid vehicles and a declining market for pure electric cars. This is shaping manufacturers' decisions and plans and forecasts. For example, the profit margins of Tesla, one of the most well-known electric car manufacturers, are steadily declining, and growth is slowing down from 2023[1].
"It is clear that the transition to electrification will not be linear and that customers and markets will move to electrification at different speeds. We continue to be pragmatic and flexible while maintaining our leading position in electrification and sustainability," Volvo now says.
Experts now note that government subsidies for renewable energy vehicles are used to encourage consumers to buy fully electric cars. However, with these incentives expiring and the price of crude oil falling, the attractiveness of owning a fully electrified vehicle has diminished.
According to Volvo, the slower-than-expected roll-out of charging infrastructure and the additional uncertainty created by the recent tariffs for electric cars in various markets have contributed to this.
However, Volvo Cars, owned by China's Geely, is the latest major carmaker to scale back its ambitious plans to switch to all-electric vehicles.
In mid-summer, Luca De Meo, CEO of French carmaker Renault, warned that customers were not yet ready to switch to battery-powered vehicles. German luxury carmaker Porsche has also lowered its target to sell only fully electric vehicles by 80%. Other major carmakers, including Ford and Fiat, have also expressed concern that plans for all-electric cars by 2030 may be too ambitious."
Electric cars have exploded in popularity and may soon be forgotten
Electric car sales have grown dramatically in the last few years and peaked with 10 million electric cars on the road in 2020 and 45 million in 2023[2].
According to the International Energy Agency (IEA), 790 million electric cars will need to be in the world by 2035 if we are to reach zero energy consumption by the middle of this century. This means that sales must grow by 27% every year.
However, there have been increasing doubts about this ambition recently. Global sales of Tesla, the world's largest EV manufacturer, were lower in the first quarter of 2024 than in the same period in 2023. In Europe, sales of EVs in the last quarter of last year were down by more than a percentage point compared with the same quarter last year.
More and more people say that the high cost of electric cars is putting them off. The average cost of a new electric car in the US is more than USD 60 000, and the average cost for a Chinese consumer is around USD 30 000. However, a conventional car can be bought at a much lower price, and in the current economic climate, more and more people are opting for a more economical and reliable version of a conventional car.
The number of electric cars in the world is still growing
However, the number of electric cars worldwide is still currently estimated to be growing. This is according to the latest research carried out in Germany.
The Centre for Solar Energy and Hydrogen Research (ZSW) reported that by the end of 2023, there were over 43 million electric cars on the road - around 50% more than a year earlier. This figure includes pure electric cars, plug-in hybrids and range-extender electric cars.
According to ZSW, there were 23.4 million such cars in China, more than half of the total global population. The USA is in second place, although it is well behind, with 4.8 million vehicles. Germany is in third place with 2.3 million EVs, ahead of France and the UK with 1.6 million and 1.5 million, respectively.
In 2023, the largest producers of pure electric vehicles and plug-in hybrids were Chinese brand BYD, with just over 3 million new registrations; Tesla, with 1.8 million; and VW, with 1 million. BMW was in sixth place with just under 570,000 vehicles, and Mercedes in tenth place with just over 400,000 vehicles. According to aggregated new registrations, the two most common electric cars are owned by electric car pioneer Tesla: the Model Y, with almost 2.5 million cars, and the Model 3, with a good 2.3 million cars.
