Volvo Cars today announced a revised business strategy, adjusting its electrification ambitions in response to slower-than-expected growth in the electric vehicle market. The Volvo electrification strategy aims to address these changes.
Updated Business Targets
The company aims to surpass the premium car market’s growth rate until 2026, building on its consistent outperformance in recent years. Volvo Cars targets an EBIT margin of 7-8% for the full year in 2026, despite increasing complexity in global trade and tariffs.
Electrification Strategy Revision
Volvo Cars has revised its electrification ambitions, targeting 50-60% of its global sales to comprise electrified cars by 2025. This move is a core component of the Volvo electrification strategy and includes both plug-in hybrids and fully electric models. By 2030, the company anticipates electrified cars will represent 90-100% of its global sales volumes.
Environmental Performance Goals
The company aims to reduce its CO2 footprint per car by 30-35% by 2025 compared to a 2018 baseline. This objective is integral to the overall Volvo electrification strategy. Volvo Cars is targeting a more ambitious reduction of 65-75% by 2030.
Investment and Distribution Plans
Volvo Cars intends to consider potential shareholder distribution once its ongoing investment phase concludes. Further details about the Volvo electrification strategy will be disclosed at a later date.
CEO Statement
“Volvo Cars stands at a pivotal and exciting crossroads in our journey,” said Jim Rowan, chief executive of Volvo Cars. “We have been laying the foundations for the last few years that put us in the strong position we are in today.”
Industry Insights
The shift toward electrification in the vehicle manufacturing industry has gained momentum, but slower-than-expected growth has led many manufacturers to adjust their strategies. The Volvo electrification strategy reflects the company’s commitment to sustainability and adaptability in a rapidly changing market.