Volvo has joined the growing list of premium automakers like Porsche, Mercedes, and Bentley retreating from their ambitious battery electric vehicle (BEV) goals. Volvo was among the first to set a bold target of selling 100 percent BEVs by 2030, a pledge made in 2021.

However, the company has now backtracked, acknowledging that hybrids remain crucial due to current market dynamics and consumer demand. In its latest announcement, Volvo revealed a revised goal: 90 to 100 percent of its global sales will consist of electrified vehicles—both BEVs and plug-in hybrids (PHEVs) —by 2030. The remaining 10 percent will allow for the sale of mild hybrid models.

Just a year ago, Volvo's Chief Commercial Officer, Björn Annwall, told Automotive News Europe at a launch event, "Volvo will not sell a single car that is not fully electric after 2030, regardless of market. There's no ifs, no buts."

However, the latest statement marks a clear departure from that bold commitment to going fully electric by the end of the decade.

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Jim Rowan, chief executive of Volvo Cars, stated, “We are resolute in our belief that our future is electric. However, it is clear that the transition to electrification will not be linear, and customers and markets are moving at different speeds of adoption. We are pragmatic and flexible, while retaining an industry-leading position on electrification and sustainability.”

However, Volvo says it remains committed to full electrification, with its investment plan and product strategy still focused on electric cars. The revised goals are not expected to impact its capital expenditure plans as the company continues developing plug-in and mild hybrid cars.

By 2025, Volvo expects electrified vehicles (BEVs and PHEVs) to account for 50 to 60 percent of its sales. In Q2 2024, BEVs made up 26 percent of Volvo’s total sales, with all electrified models, including PHEVs, accounting for 48 percent.

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Volvo has already launched five BEV models—EX40 (formerly XC40 Recharge), EC40, EX30, EM90, and EX90—with five more in development. The company expects to have a full electric lineup by 2030.

Due to its revised electrification goals, Volvo is also updating its CO2 reduction targets. By 2030, it now aims for a 65 to 75 percent reduction per car from 2018 levels, down from the previous goal of 75 percent. For 2025, the target is 30 to 35 percent, reduced from the earlier 40 percent goal.

Volvo states that this shift toward an all-BEV future reflects challenges such as slower-than-expected charging infrastructure development, withdrawal of government incentives in some regions, and new tariffs on BEVs.

However, this might only tell half the story. Even in China, where New Energy Vehicle (NEV) sales, including BEVs, PHEVs, and REEVs, account for over 50 percent of cars sold locally—and around 65 percent of all global electrified car sales—current trends show that plug-in hybrids are winning consumer favour over BEVs.

The primary reasons are lower prices and the absence of range anxiety.

In July 2024, 396,000 hybrids were sold in China, making up 45.1 percent of total NEV deliveries, according to data from the China Passenger Car Association (CPCA). While over 50 percent of cars sold are electrified, BEVs account for a much smaller percentage of overall sales. The biggest winners in China in hybrid sales so far in 2024 are BYD, Volkswagen, and Toyota.