Volvo Australia has decided to fast-track its switch to electric, vowing to sell EVs only in Australia by 2026, well ahead of the car brand’s global commitment to do this by 2030.
The new commitment was announced on Thursday by Volvo Australia managing director Stephen Connor, shortly after the official launch in Australia of the new C40 Recharge – its first electric only SUV, adding to the XC40 that is already on the market and the EX90 that is soon to be revealed.
Connor says the decision has been taken because there is no long term future in cars with internal combustion engines. And despite Australia’s relatively slow take-up of EVs to date, it senses its customers are ready to make the switch.
“The earlier deadline will allow us to meet the expectations of our Australian customers and be part of the solution when it comes to fighting climate change,” Connor said.
“Sustainability is as important as safety to us, with climate action having the highest priority.
Electric Vehicle Council chief executive Behyad Jafari said it is a “truly remarkable announcement” from Volvo.
“It shows they appreciate the momentum for EVs building in the Australian market and they see the opportunities in meeting the demand,” Jafari said.
“Most Australians now want an electric car – the problem is a lack of supply and a lack of choice. Having Volvo plug part of this gap will make a significant difference.”
The commitment is four years ahead of the global commitment announced by Volvo Cars in early 2021 that it intends to only sell fully electric cars by 2030 and phase out any car in its global portfolio with an internal combustion engine, including hybrids.”
“To remain successful, we need profitable growth,” then chief executive Håkan Samuelsson said at the time. “So instead of investing in a shrinking business, we choose to invest in the future – electric and online. We are fully focused on becoming a leader in the fast-growing premium electric segment.”
Volvo Trucks is also moving quickly, becoming the first in the world to start series production of heavy duty electric trucks, with a target of 50 per cent electric sales globally by 2030, and 70 per cent in Europe.
Volvo is also putting its money where its mouth is in terms of an overall zero emissions strategy. It has committed to being a fully climate neutral company by 2040 – including to reduce overall vehicle CO2 lifecycle emissions by 40% by 2025.
Currently its manufacturing plants are running on 80% hydroelectric energy – and in 2021 its Torslanda (Sweden) car plant became its first ‘climate neutral’ one.
In September 2022, European sales of plug-in electric vehicles (PEVs) reached 24% of all new car sales, with full battery EVs (BEVs) making up two thirds of these. (The other third being plug-in hybrids – PHEVs).
In sales numbers, this equates to almost a quarter of a million new PEVs sold in one month. That market size and percentage would be an enviable one to be selling EVs into – especially as EV numbers grow and ICE car sales diminish.
In Australia however, PEV sales are likely to make up no more than perhaps 3.7 to 4% of annual light vehicle sales for 2022. (Or something like 40,000 PEVs in total). Given our low sales percentage and volume, Australia has a fair way to go for EVs to be hitting our roads in significant numbers … yet.
Volvo Australia’s goal is to sell 20,000 fully electric cars a year, giving it a bigger share of the EV market than it does in the current overall passenger car market.
It expects EVs to account for 80 per cent of its annual sales by 2025, and Connor says the hardest part is to convince he last 20 per cent.
“The decision to sell only electric cars from 2026 makes perfect sense, and we believe it will give us a strategic advantage in the Australian market,” he said.
“the final piece of the jigsaw will be converting the last 20 per cent of our customers to a fully electric future from 2026.”
Alongside this announcement is a commitment to install DC charging of at least 75kW in all Volvo dealers, including free charging (and perhaps a coffee) as part of their after sales customer service program.
The Driven’s view: It would appear that in taking this decision, Volvo Australia are seizing the first-mover advantage in order to be seen here as the leader in manufacturing and selling vehicles that significantly reduce their climate damaging effects.
It will be interesting to see if the other vehicle sellers here start to feel compelled to make similar announcements, or be potentially left behind in the growing ‘climate awareness purchasing’ decision factor of the buying public.
Note: *The PEV category includes all EVs with charging plugs – i.e. both full battery (BEV) and plug-in hybrid (PHEV).
See also: First Impressions of C40 Recharge, Volvo’s latest electric SUV
And: “Not like anything I’ve tried before:” First drive of Volvo’s heavy duty electric truck