By the end of this decade, Volvo will not sell any gasoline-powered cars. The announcement this morning makes Volvo the latest in a series of automakers to announce plans to go all-electric by a certain target date. Volvo’s 2030 target is more aggressive than most of its rivals.
At least 25 countries have implemented target dates to ban or heavily-restrict sales of gasoline-powered cars. Several significant markets for Volvo, including Germany and its home of Sweden, have laws that will make it difficult or impossible to sell newly-built gasoline-powered cars by 2030. China’s Geely Auto actually owns Volvo, though the brand maintains its world headquarters in Gothenburg, Sweden.
The company will sell its last purely gasoline-powered car long before that. Volvo says that half of its global sales should be electric cars by the end of 2025, with the other half consisting of hybrid models. The company aims to be carbon-neutral by 2040. This is a goal that will require working with suppliers to revamp their production processes.
The first of a planned slate of electric cars bowed today in the form of the 2022 Volvo C40 Recharge.
Direct Online Sales Planned
The automaker plans other major changes to its sales approach, saying that Volvo cars will be sold exclusively online. The company has yet to announce a target date or explain how it will extract itself from relationships with hundreds of its franchised dealerships.
Typically, automakers do not own and operate their own dealerships. Rather, retailing is through franchise local dealerships serving as business partners. These independent outlets are not controlled by the companies whose cars they sell. Only Tesla follows a different model in the United States. It operates storefronts that allow shoppers to buy directly from the automaker itself. State laws prevent that business model in many places. However, these laws have been slowly changing over the 17 years of Tesla’s existence.
Volvo would be the first automaker to follow Tesla’s example – a move likely to stir up an industry where relationships between car builders and their dealerships have at times been tense over the possibility of the Tesla model spreading.
Volvo CEO Håkan Samuelsson said Volvo will also move to wireless upgrades and fixes for its electric cars, and will “radically reduce” the complexity of its lineup.
