Volvo Pulls The Plug On All-Electric Future

In a twist that “few saw coming,” Volvo has officially pulled the plug on its once-bold promise of becoming an all-electric carmaker by 2030. Yes, the same Volvo that told us in 2021 they were leading the charge toward an all-electric, emission-free utopia, has decided to use a generator. Volvo, known for its reputation in safety and sensible engineering, has taken a more practical route, opting for a strategy that doesn’t give up the internal combustion engines in the foreseeable future.

The new plan? Instead of fully phasing out fossil-fueled vehicles, Volvo is aiming for 90% of sales in 2030 to be a combination of fully electric vehicles (EVs) and plug-in hybrids (PHEVs). “The remaining 10% will allow for a limited number of mild hybrid models (48V) to be sold, if needed.” -Volvo Cars. For many of us in the industry, this feels less like abandoning the future and more like admitting that maybe, just maybe, the hype around going fully electric was a bit overblown.

Volvo’s shift isn’t a retreat, it’s a pivot, putting the public focus on hybrids, specifically plug-in hybrids. PHEV will be the backbone of Volvo’s future strategy, and for good reason. PHEV offers the best of both worlds. Drivers experience the benefits of pure EV in short distances that cover the majority of daily travel, making the most substantial impact on tailpipe emissions, while still enjoying the ability to travel long distances with the tried-and-true infrastructure built around the combustion engine. The ability to travel unhindered by charging stations is not going away and will continue to appeal to the masses. 

PHEVs are perfect for those who aren’t ready to commit to an all-electric lifestyle.  Despite what flashy EV marketing might suggest, not everyone is willing to wait 30 minutes at a charging station or worry about range when the nearest outlet is 50 miles away.

Volvo’s decision to slow down on full electrification isn’t just about consumer hesitation. Outside of Tesla’s network of Superchargers, the lack of charging infrastructure is still a massive hurdle, especially outside of urban, “progressive” areas. While the vision of a world where everyone plugs in overnight sounds nice, the reality is that public charging stations aren’t exactly popping up on every corner. This problem plagues electric vehicle owners that are not homeowners. Many people in apartments and cities have no access to charging stations where they live, and landlords may not want to install new services for a tenant, leaving EV owners with potentially dangerous temporary plug-in connections to outlets never designed for the sustained loads electric vehicles require. For shop owners and technicians, this isn’t news, just amusement as OEMs realize their marketing departments promised a bunch of hype. EVs might be the future, but it’s a distant one. Hybrids are very much the present.

Governments that once threw money at EV subsidies are pulling back, leaving consumers less incentivized to make the switch. On top of that, new trade tariffs have made importing EVs more expensive, especially for manufacturers like Volvo that produce a significant portion of their electric cars in China. The all-electric dream continues to look more like a costly experiment.

Even Volvo CEO Jim Rowan acknowledged that “the transition to electrification will not be linear.” Translation: getting rid of combustion engines is harder than it looks from the drawing board. While some manufacturers are still attempting to push an EV-only future, Volvo is admitting the truth, it’s not realistic, even by 2040. The company plans to continue selling mild hybrids, which still use fossil fuels, but receive a small boost from a 48V “hybrid” system. Essentially an electric band-aid on a traditional engine that satisfies the EPA’s rubber stamp of approval to be a “hybrid”.

For most of us in the automotive industry, hybrids have always made more sense than the all-or-nothing approach of full EV adoption. They provide a realistic solution to many of the issues facing full electrification. Want some street cred at Whole Foods without worrying about whether you’ll find a charging station on a road trip? Hybrid. Need to lower fuel expenses but can’t be held hostage by a fleet of fully electric vehicles? Again, hybrids get the gold star of approval, both from the EPA and a practical standpoint.

Volvo’s decision to focus on hybrids isn’t just a course correction, it’s recognition of reality. Fully electric cars may be great for city commuters with short daily drives, but for the average customer, and certainly for the commercial vehicle market, it’s just not time, and won't be anytime soon. 

Volvo expects PHEVs and EVs together to make up 50-60% of its sales by 2025, a modest but achievable goal. And given that fully electric cars made up only 26% of Volvo’s sales in the second quarter of 2024, it’s clear that there’s still a strong demand for vehicles that don’t require drivers to gamble on whether they’ll find a charging station in time. Plug-in hybrids have always been, and will continue to be the answer. Volvo is doubling down on them. Most consumers are not willing to make the all-electric leap and OEM’s are finding they don’t have a long enough extension cord to stay plugged-in. 

Volvo’s shift is not an isolated case either, or other manufacturers, including Ford and General Motors, are also pulling back on their ambitious EV targets in the face of real-world challenges. Turns out transitioning to an all-electric fleet isn’t as simple as putting a battery in a car, slapping the roof, and telling the customer how many KWh this baby can fit. Issues like range anxiety, high vehicle costs, and slow charging infrastructure rollout, are making customers think twice about how they power their commutes. 

At the end of the day, what Volvo and the other OEMs are admitting is that EVs are great in theory but hybrids are what’s practical. Sure, all-electric cars might make headlines and get the “green” crowd excited, but hybrids are the workhorses that actually get the job done. Most customers care more about getting from point A to point B without hassle than they do about bragging rights at Whole Foods.

While Volvo has backtracked on its all-electric promise, it hasn’t abandoned its green goals entirely. The company still aims to become a fully electric carmaker “in the long term” and is sticking to its plan of achieving net-zero greenhouse gas emissions by 2040, which if anything, is the most realistic goal. In the meantime, Volvo will continue with plug-in hybrid models, improving battery technology, and offering customers a taste of what electric driving could be, without the all-in commitment.

That sounds like a pretty smart strategy. Volvo’s not throwing out the playbook on electrification, just adding a few more plays before the all electric hail mary. Volvo’s fully electric models, like the EX 90 and EX30 are performing well in the European market. The EX30 is currently ranked as the third best-selling EV in Europe, but the shift toward hybrids reflects the market’s current needs. Hybrids aren’t just a bridge, they are reality, and will continue to be well into the future.