Half of Volvos to be EVs by 2025

VOLVO Cars management has announced changes to its global business plans that will see the car-maker generate half of all of its annual sales from fully electric vehicles by 2025.

 

The Chinese-owned Swedish car-maker is also aiming for half of the cars it offers to come from its subscription services, while one third of all of the vehicles sold by the middle of the next decade are expected to be autonomous driving cars.

 

Volvo said in a statement that the changes would “transform its connection to its customer base” as the company looks to build more than five million direct consumer relationships by midway through the next decade.

 

According to the company, this will help it develop new connected and other services for its customers.

 

Volvo already offers plug-in hybrid variants of a number of models including the XC60 and XC90 SUVs, with an electrified XC40 on the way, but it is yet to release a fully electric vehicle.

 

Its first fully electric production model is expected to be an EV version of the XC40 crossover and is due late next year or in early 2020.

 

As previously reported, Volvo has started to roll out its Care by Volvo subscription service in a number of global markets and the company’s Australian arm is planning on kicking it off Down Under by about 2020.

 

Care by Volvo is similar to a mobile phone plan in that a customer signs up for a two- or three-year contract and pays a monthly fee that covers almost everything except for petrol or electricity.

 

Volvo Cars president and chief executive Hakan Samuelsson said the changes to its business plan would help the brand transition from being a traditional car company.

 

“Our customers’ expectations are changing rapidly,” he said. “This means that Volvo Cars is also changing rapidly. These initiatives will help transform Volvo from being purely a car company to being a direct consumer services provider.”

 

The company says it aims to generate “premium level profitability” of a similar level to other premium car-makers. This will be led by increased sales in three major regions – presumably China, US and Europe – as well as entering new market segments, such as autonomous ride-hailing vehicles.

 

Volvo Cars will also reduce its overheads by sharing development and economies of scale with its Lynk & Co offshoot and Polestar electric performance car brand.

 

“This paves the way for Volvo Cars to continue growing fast into the middle of the next decade,” Mr Samuelsson added. “The company has been transformed since 2010 into a global premium car company. Now it is time for this transformation to be turned into a period of sustained profitability in line with other premium brands.” 

 

Volvo was bought by Chinese giant Geely Holdings in 2010 and has since invested heavily in new product and research and development into new powertrains and safety technologies.

 

Last year, the company sold 571,577 vehicles globally, a new record, and it recorded a 27.7 increase in operating profit.

 

In Australia, Volvo sold 4681 units in 2017, which was 20.4 per cent off the 2016 result. So far this year, the Swedish brand has grown its sales by 29.5 per cent to 2383 units, largely on the back of interest in the XC60 mid-size SUV and the freshly launched XC40.

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