Volvo Cars said Tuesday it planned to become a “fully electric car company” by the year 2030, with all sales of the firm’s pure electric models set to move online.
In order to meet its target, the company will look to remove cars with internal combustion engines — including hybrids — from its global offering by the end of the decade.
The Chinese-owned automotive giant launched its first all-electric car last year. In the mid-term, it wants half of global sales to be fully electric by 2025, with hybrids accounting for the other half.
“There is no long-term future for cars with an internal combustion engine,” Henrik Green, Volvo Cars’ chief technology officer, said in a statement.
“We are firmly committed to becoming an electric-only car maker and the transition should happen by 2030,” Green added.
Speaking to CNBC’s “Squawk Box Europe” on Tuesday morning, CEO Håkan Samuelsson sought to flesh out some of the details connected to the “online only” sales model, explaining that there were several elements to getting a car.
“Number one is, of course, seeing very transparently, what do they cost, what models are available … call it the ‘menu’ — that will be online, and that’s also where you put in your order,” he said.
“But you need also, of course, to see the car and test drive it — that will continue,” he added.
“So, a customer will walk in and test drive a car and then the salespeople … will of course also assist the customers to put their order in volvocars.com.”
“I think many will do that, probably most,” Samuelsson said, “but some, more and more, will probably do it also by themselves in their living rooms, just ordering it directly.”
“I think it is very important to say this is not … online sales where you pick up the car in some harbor, the car will still be delivered and demonstrated by our partners.”
Samuelsson went on to describe hybrids as a “bridging technology” before adding that long term, “it’s all electric cars.” Online sales, he added, offered transparency.
“Will it lower the margins, will it lower our costs? Yes, probably, and I think that’s something we and our partners need to work with because the competition will be tough.”
“But the cost will be lower, mainly from online,” he went on to explain. “Not because we take a bigger share of the cake — it’s because it’s a more efficient way of distributing cars, we are avoiding having cars standing too long in the wrong showroom.”
“And of course, it also offers loyalty, so we keep the customer and we lower our costs for customer acquisition. So it’s a leaner and more efficient way of selling cars.”
Electric tech, new targets
Volvo Cars becomes the latest major automotive firm to lay out plans for a future centered around electric mobility.
Ford, for example, recently said it would invest $1 billion in an electric vehicle production facility in Cologne, Germany, with the European arm of the company committing to go “all-in” on electric vehicles in the years ahead.
In plans announced last month, Ford said its entire passenger vehicle range in Europe would be “zero-emissions capable, all-electric or plug-in hybrid” by the middle of 2026, with a “completely all-electric” offering by 2030.
February also saw Jaguar Land Rover announce that its Jaguar brand would go all-electric from the year 2025. In addition, the company, which is owned by Tata Motors, said its Land Rover segment would roll out six “pure electric variants” over the next five years.
Elsewhere, South Korean carmaker Kia will launch its first dedicated electric vehicle this year, while Germany’s Volkswagen Group is investing approximately 35 billion euros (around $42.14 billion) in battery electric vehicles and says it wants to roll out roughly 70 all-electric models by 2030.