Volvo Backs Down From 2030 All-EV Commitment for Hybrid Approach: Here’s What’s Coming Now

It’s been about three years since Volvo stated its bold EV goal: By 2030, all of its products worldwide would be battery-electric vehicles (BEVs). At the global reveal of the 2025.5 XC90 (pictured here), sold in mild hybrid (MHEV) and plug-in hybrid (PHEV) versions, Volvo announced that internal combustion engines would still be part of the lineup come 2030 and beyond.

“Everybody made a lot of assumptions two, three, four, five years ago, and that’s changed,” Volvo CEO Jim Rowan explained. “The market’s changed. EV subsidies taken away, trade tariffs come in and add on costs. Five years ago you could import a car into the U.S. from China for 2.5 percent. It went to 27.5 percent, it’s now 102.5 percent. We saw the same thing happen in Europe. We saw a slowing demand for EVs. You can either look at all of that stuff and say ‘I’m just going to do the same thing’ or ‘I’m going to pivot’.”

This is not to say Volvo will return to non-electrified powerplants. In 2022, Volvo spun off its internal-combustion development and production to a new company called Aurobay, a joint venture with Chinese automaker Geely, Volvo’s majority stockholder. Aurobay now supplies the engines for Volvo’s mild hybrid (MHEV) and plug-in-hybrid (PHEV) models, and a new-design internal combustion engine is unlikely.

While internal combustion vehicles will now likely remain in the Volvo lineup beyond the end of the decade, Volvo says that by 2030, 90 to 100 percent of the cars it sells will have a plug, a figure that includes both BEVs and PHEVs. Improvements to battery technology developed for pure EVs should improve PHEV range as well. While some buyers opt for PHEVs because they are the most powerful variant in a given Volvo model line (see: the T8 versions), Volvo says that over 50 percent of the miles its PHEV owners drive are powered by electricity.

Rowan explained that the pace of electrification has been slower than expected, and for various reasons. “We’re making these assumptions four, five years ago that the market was going to move at a certain speed,” he said. “Some markets have. Norway is 85 percent, somewhere in that region. [Ed. note: Market share of EVs in Norway has now passed 90 percent.] West coast of the U.S. is pretty good. Northern Europe’s pretty good. Southern Europe is slow. The interior of the U.S. is slow. The provinces of China are really slow… The bottom line is when you are in these big transitions, it’s very difficult, unless you are pragmatic about the approach, to get it right.”

Rowan emphasized that while the timeline has changed, Volvo’s commitment to the electric transition has not.

“I still believe in electrification,” he said. “I still think electrification is a much better propulsion system than internal combustion, and for various reasons. A good internal combustion engine is probably 35 percent efficient at best. A good EV is 91, 92 percent. And everyone’s invested in EVs. There’s not many people invested in ICE at this point. The investment capitol that’s going into energy density on batteries, inverter modules, new technologies… all of that is going to increase the benefits of electrification.

“At the end of the day, technology will win and electrification will be the technology of the future, but it’ll just take a little bit longer than everybody first thought.” So what should we expect? According to a September 17 update from the automaker, there’s a new timeline for certain EVs and future vehicles, including some interesting new nameplates. The EX90 is the first of a series of new models said to be coming, and it’s already going into production this year. Next will be an EX60 SUV to replace the XC60, based on the SPA3 platform sometime around 2026. Between then, the delayed EX30 will launch in 2025. The XC40 Recharge model will also get a replacement in a new model dubbed the EX40. A new EV60 Cross Country model is said to be in the works, which will be something like a lifted wagon bodystyle, followed by an ES90 electric sedan to replace the S90. Rounding out the model onslaught will be significantly updated hybrid XC90 and XC60 models in the next two years with longer pure EV ranges from their plug-in hybrid battery packs.