Volvo might join automakers turning to hybrids and PHEVs

Volvo has been one of the louder voices in calling for a shift towards the usage of electric vehicles only. Not a year after the release of the XC40 Recharge on March 2, 2021, the company stated its plan to transition to selling only electric vehicles and ended production of cars with internal combustion engines, including hybrids. By 2023, when the C40 is on dealership floors, and the EX90 and EX30 are in the works, Volvo financial officer Bjorn Annwall affirmed this outlook, saying the company wouldn’t “sell a single car” that isn’t 100% electric after 2030; the statement “There’s no ifs, no buts” strongly underscored this position.

In an interview with Mr.Jim Rowan, the Chief Executive Officer of Mitsubishi Motors Australia, he opined that in-between technology might help customers transition by opting for hybrid powertrains. A quoted report from Automotive News, a person said the proportion of plug-in hybrids in the lineup may be increased in the next ten years due to the increasing global market and regulations related to electric vehicles. If this is true, it would place Volvo in a line of renewable automotive firms that are stepping up the efforts in the production of hybrids and PHEVs for release in the coming years.

Nonetheless, Volvo may be well placed to embrace this new change given that the company has had great experience dealing with hybrids and PHEVs. All the internal combustion engine models of Volvo are still supported by the SPA1 platform, which remains solidial. New and future developments of battery technology plus the backing and resources from its parent company, Geely, may enable Volvo to continuously progress this architecture onward into the following decade. The possibility of its future cooperation with Renault, which Geely recently entered a joint venture of investing 7 billion euros to improve the efficiency of non-hybrid and hybrid engines, adds to this picture.

The push towards hybrids also reflects the desires of Volvo's US dealers, with some expressing strong sentiments about the need to stick with hybrids or face significant challenges. In the short term, Volvo is experiencing similar struggles to other automakers. Sales have been impacted by slower EV growth, resulting in substantial year-over-year declines for several manufacturers.

The overall EV market growth has slowed to 11% this year, down from the 48% growth rate observed in Q2 2023. Additionally, tariffs on European-built Volvo EVs, ongoing technical issues with the EX30 leading to refunds for some European buyers, and delays in launching the EX90 at the South Carolina plant have all compounded these difficulties.