In a move to catch up with other major automotive manufacturers, Volvo has revealed that it is already laying out plans to rapidly shift its product line to electric cars in the coming years. The Swedish manufacturer announced that it is currently aiming to produce as many electric vehicles as its combustion engine-equipped products by 2025. Volvo is hoping to earn half of its overall sales revenue from fully electric vehicles around the same time.
According to the head of the Chinese-owned carmaker, the company is now preparing to spend billions of dollars in the next few years on developing and manufacturing new electric vehicles. Reports have shown that global automakers are now preparing investments of more than US$300 billion over the next decade in electric vehicle technology research and development.
Most company's who have decided to adapt to the growing demand have admitted that the first few years of the shift to electric products will negatively affect their bottom lines. However, as their technologies progress and their manufacturing processes become more efficient, companies are certain that they would make up for their losses in the following years.
Volvo Cars Corporation AB chairman Hakan Samuelsson explained to reporters that transitioning to fully electric vehicles will be a very difficult endeavor given the cost involved in developing electric cars. However, the chairman is positive that they will be able to reach their goals for 2025 and hopefully generate profit from their strategy. Samuelsson also mentioned that she hopes technologies for components such as batteries would improve, which will result in a reduced cost of electric vehicle production.
Volvo revealed that it is planning to spend around 5 percent of its annual revenue, or around US$1 billion, per year to develop and build electric vehicles. The firm, currently owned by China's biggest multinational automotive company Geely Holding Group, is also planning to developer driver-less technologies for their future products.
With the investment, Volvo hopes to deliver at least five new fully-electric models in the next couple of years. The company had already introduced the first of its planned five models in the form of the fully-electric 2020 Polestar 2. The vehicle was manufactured by the company's performance brand to rival the Tesla Model 3. The next vehicle on the list will reportedly be a fully electric compact SUV, which is slated to be unveiled this year.
Aside from developing passenger vehicles, Volvo is also a big player in the manufacturing of vehicles for industrial and commercial applications. The company currently produces and sells construction equipment and commercial vehicles such as trucks, buses, and heavy-duty trucks. These types of vehicles will likely also be shifted to sport electric powertrains as part of the company's plan.
