The chip shortage is taking a toll on the auto industry, which is increasingly reliant on semiconductors.
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Swedish car manufacturer Volvo Cars The automaker on Wednesday abandoned its near-term goal of selling only electric vehicles, citing the need to be “pragmatic and flexible” amid changing market conditions and cooling demand.
Volvo Cars, owned by China's Geely Holding, is one of the first traditional carmakers to commit to a full switch to electric vehicles. The company said its long-term goal remains to become an all-electric vehicle manufacturer.
However, the company declare Currently, the company aims to have 90% to 100% of the cars it sells be pure electric or plug-in hybrid models by 2030, while up to 10% will be a limited number of mild hybrids.
target replacement 2021 Commitments Volvo Cars' product lineup will be fully electric by the end of the decade.
The move means Volvo Cars follows other industry players in scaling back its electric vehicle ambitions. German automakers Mercedes-Benz Group and Volkswagen have previously announced changes to their electric vehicle strategies.
“Electric vehicles offer a superior driving experience and increase the possibility of using advanced technologies to improve the overall customer experience,” Volvo Cars Chief Executive Jim Rowan said in a written statement on Wednesday.
“However, it is clear that the transition to electrification will not be linear, with customers and markets adopting at different rates,” he continued.
“We are pragmatic and flexible while remaining an industry leader in electrification and sustainability.”
Volvo Cars shares fell more than 4% on Wednesday.
The Volvo EX30 all-electric electric car is on display at Everything Electric London 2024 at ExCel on March 28, 2024 in London, England.
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Volvo Cars said the share of pure electric vehicles in its lineup was 26% in the second quarter of 2024, noting that this was the highest level among its premium peers. The company said its electrification share (referring to electric vehicles and plug-in hybrid vehicles) is 48%.
Volvo Cars highlighted challenges facing its electrification ambitions, saying the slower-than-expected rollout of charging infrastructure, the removal of government incentives in some markets and recent EV tariffs in various markets created additional uncertainty.
Volvo Cars said the developments showed that “stronger and more stable government policies” were still needed to support the transition away from fossil fuels.