Earlier this year, Volvo had to abandon its goal of selling only electric cars by 2030. Now, the Chinese-owned brand’s CEO admits that electric cars are harder to sell than anticipated.
Volvo acknowledges that the transition to selling electric cars in the volumes initially expected is taking longer than planned.
Previously, Volvo aimed for its entire sales portfolio to consist exclusively of electric cars by 2030. However, the company has adjusted its target and now expects "90-100 percent" of its sales to come from electric cars and plug-in hybrids by 2030.
A Slower Transition Than Expected
Volvo Cars CEO Jim Rowan stated in an interview with Automobilwoche that the full transition to electric vehicles is more time-consuming than anyone predicted just four or five years ago.
“It has become clear that the road to fully electric cars will take a little longer than anyone imagined four or five years ago. That’s okay,” Rowan said.
He emphasized that interest in electric cars remains high, particularly in countries where financial incentives and support programs are available to buyers.
Challenges in Production and Pricing
Rowan pointed out challenges surrounding the production and pricing of models like the Volvo EX30. He explained that high fines and production costs will increase the car's price before it can be manufactured in Europe.
“The price of that car will increase. We have to decide how much of that increase will be paid by customers. The higher the price, the greater the impact on sales volume,” Rowan explained.
Market Factors and Strategy
Volvo’s shift in strategy reflects the challenges of transitioning to electric cars, which depend on various factors such as market dynamics, production costs, and customers' willingness to pay higher prices.
Nevertheless, Rowan emphasized that electric cars remain a key part of Volvo’s long-term product strategy.
Volvo is not alone in facing difficulties with electric car sales.
Stellantis, the parent company of Fiat and Maserati, recently announced extended production stops for the electric 500e and other models due to similar challenges in market demand.
