Volvo has announced that it will no longer pursue its previously stated goal of producing only fully electric vehicles by 2030.
The carmaker now anticipates that it will continue selling some hybrid models by that date, citing shifting market conditions as the reason for its revised plan.
This decision comes amid declining demand for electric vehicles (EVs) in key markets and uncertainty caused by tariffs on EVs produced in China.
Volvo, known for promoting its environmental sustainability, follows other major automakers like General Motors and Ford in scaling back its EV targets.
By 2030, Volvo expects at least 90% of its production to consist of electric and plug-in hybrid vehicles, with a small percentage dedicated to mild hybrids, which are traditional cars with limited electrical support.
“We are resolute in our belief that our future is electric,” said Jim Rowan, chief executive of Volvo, in a statement.
“However, it is clear that the transition to electrification will not be linear, and customers and markets are moving at different speeds.”
The company also said the business climate for EVs had changed, due to factors such as a slow rollout of charging infrastructure and the withdrawal of consumer incentives.
The decline in demand for electric vehicles (EVs) has been especially noticeable in Europe, partly due to the withdrawal of purchase subsidies in countries like Germany.
According to the European Automobile Manufacturers Association, EV registrations in the European Union fell by nearly 11% in July.
Volvo, which is majority-owned by Chinese carmaker Geely, will also be impacted by tariffs on Chinese-made EV imports in Europe and North America, as it manufactures vehicles in China.
Last week, Canada announced a 100% tariff on EV imports from China, following similar measures from the US and EU.
Western nations have accused China of subsidizing its EV industry, giving its manufacturers an unfair advantage. In response, China has rejected these claims and condemned the tariffs as “discriminatory.”
Ford has also scaled back its EV goals. Last month, the US automaker canceled plans for a large all-electric SUV and delayed the release of its next electric pickup truck.
Similarly, General Motors has reduced its EV production targets over the past year.