Volvo’s Strategic Shift: Aiming for 90% Electrified Fleet by 2030 While Evolving PHEV Technology Amidst Infrastructure Challenges

Volvo has revised its earlier commitment to exclusively sell plug-in vehicles by 2030, now aiming for 90% of its sales to be electrified by that year. Despite this adjustment, company leaders were quick to clarify the details of this new goal.

During recent discussions with journalists, Volvo emphasized that the adjusted timeline does not imply they will continue producing gasoline vehicles until regulations prohibit their sale. Furthermore, the company is prepared to transition entirely to plug-in models by that time should market conditions require it.

"Chasing BMW in engine production isn’t our goal," stated Björn Annwall, Volvo's chief operating officer and deputy CEO. "Our aim is to create top-tier software-defined vehicles."

Annwall is citing recent statements made by BMW, confirming their ongoing commitment to engine investment.

Volvo’s chief of engineering and research, Anders Bell, acknowledged that although the company will produce a limited series of mild hybrids that don’t require external charging into the early 2020s, this does not alter Volvo’s decision to cease development of internal combustion engines. Several years earlier, Volvo strategically exited the ICE sector and segregated its engine production activities. This led to the creation of a new entity, co-owned by its parent company Geely, which now manufactures engines to be utilized across Geely’s various automotive brands.

2024 Volvo S60 Plug-In Hybrid

Infrastructure shortcomings are a contributing factor

"In recent years, the consensus in the industry was that the adoption of battery electric vehicles would accelerate," Bell noted. "However, the development of infrastructure hasn't kept up in various regions, and we must be realistic."

According to Annwall, Volvo holds roughly 1.5% of the global market share based on sales. He noted that, heading into the early years of the next decade, if electric vehicles (EVs) make up about 50-70% of the global market, Volvo is prepared to abandon the small portion of its business that does not involve plug-in models.

"Having a crystal ball would certainly be helpful, but today's announcement highlights our lack of one," Annwall noted, pointing out that this gives Volvo the strategic leeway to adapt to the varying pace of market development across the globe.

"He emphasized that the goal isn’t to scale back on plans to transition to fully electric vehicles. Rather, it's about maintaining and enhancing our existing technology to stay competitive until 2030 or later if necessary, to continue performing well in those markets."

"The executive expressed confidence in achieving a fully electric future sooner than anticipated," noting the focus on regions like Northern Europe and specifically Norway, as discussed in the previous day's meeting.

In last week's press release, Volvo highlighted its Superset technology stack, a software and electrical framework that will premiere in the 2025 EX90 electric SUV. This technology is expected to advance with future electric vehicles, including the anticipated Volvo EX60 electric SUV, slated for release around 2026.

2025 Volvo EX90 drive mechanism

Advancing Volvo's plug-in hybrid technology?

However, in terms of propulsion, Volvo's revised approach indicates that it aims to continue selling a significant number of plug-in hybrids up to and even past this target date.

The battery packs, now more substantial in size, are replaced every several years and come with enhanced motor performance. The current 18.8-kWh battery pack, which utilizes modern three-layer technology, is less costly to manufacture than the older two-layer technology, Annwall says. In the XC90, this enables 33 EPA-rated electric miles and more powerful motor output at a reduced price compared to earlier models. "Our strategy is to keep advancing the electric components of the powertrain," he notes.

Indeed, the mechanism continues to operate using a conventional eight-speed automatic gearbox, similar to its configuration when Volvo introduced this setup ten years earlier. The electric component plays a subordinate role to the gasoline engine in terms of power and structure. Green Car Reports inquired about the potential changes and future of this system, receiving several suggestive responses.

2024 Volvo XC90 Recharge Model

"Boosting internal efficiency is key," stated Erik Severinson, who oversees new car programs and operations strategy at Volvo. He noted that electric vehicles currently achieve roughly 90% internal efficiency, compared to combustion engines, which are at about 30%. However, Severinson believes there is potential to surpass the 90% efficiency mark. "That progress is on the horizon," he remarked.

Severinson indicated that moving forward, the emphasis for future plug-in hybrid electric vehicles (PHEVs) will shift away from the cylinder count towards maximizing the vehicle's overall performance. Volvo has already started using 3-cylinder engines in its compact plug-in hybrids.

Volvo reports that, according to its global data, half of the mileage on its plug-in hybrid vehicles is covered using electric power, and this percentage is rising.

What is the ideal battery size and driving range for a plug-in hybrid? Volvo has explored various models and gathered feedback from users to gauge how they utilize the electric range, though Severinson declined to specify a definitive threshold. "Eventually, the battery increases in size and weight, which also elevates the cost of the PHEV," he noted.

2025.5 Volvo XC90 Model

2025.5 Volvo XC90 Model

2025.5 Model Volvo XC90

Severinson mentioned that faster charging speeds might diminish the importance of the size of PHEV batteries. Currently, however, Volvo’s PHEVs in the U.S., such as the 2025.5 Volvo XC90, are equipped with a slow, low-power 3.7-kw onboard charger, which is not sufficient for midday charging sessions.

Bell declined to speculate on future technological developments for plug-in hybrid electric vehicles (PHEVs) or the possibility of prioritizing the electric motor over the gasoline engine. However, he emphasized the company’s focus on selecting the most appropriate technologies for both the brand and its customers, assessing their overall benefits. He emphasized, “It’s vital that any product we develop must distinctly represent Volvo, maintaining high standards in driving experience, noise, vibration, harshness, towing capacity, and other key attributes. While these core qualities will remain consistent, the technologies we employ to achieve them may evolve.”

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