• Can EVs Save Volvo After the Covid-Induced Sales Plummet?

Volvo is looking to double down on EVs as a plan to bounce back from poor sales

Every automaker we can think of suffered from dismal sales during the first half of 2020, most of which can be attributed to the COVID pandemic. Volvo was hit pretty hard, with global sales falling 20.8 percent from January to June 2020 compared to the same time frame the year before. It was even worse across Europe, with Volvo seeing a drop in sales of 29.5 percent. All in all, Volvo posted an operating loss of 989 million krona or $111.63 million at current exchange rates. The company’s plans to bounce back rely almost entirely on electrification of its lineup. Is it a viable business plan or a bad move?

Volvo EVs – Electrifying a lineup With a Quickness

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Volvo has been very clear that it wants at least 50-percent of its sales to be from fully electric vehicles, with the remaining sales being credited to plug-in hybrids. It’s a bold goal, but not necessarily unattainable when you consider every model in Volvo’s lineup can now be had as a hybrid, the final piece of that puzzle being placed with the launch of the XC40 T5 Recharge PHEV. By the end of 2020, Volvo will also have the all-electric XC40 P8 Recharge in its lineup, which should – given the continually growing popularity of SUVs – help Volvo move closer to its 50/50 goal.

Now, in an interview with Autocar, Volvo Boss, Hakan Samuelsson, explained how the company’s PHEVs are trending. According to him, sales growth of Volvo PHEVs "demonstrates a strong trend towards our strategic ambition of being a company electrifying faster than rivals." But, he also explained his stance on the companies recent sales plummet:

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" The downturn we saw in the first half is a temporary one. We expect to see a strong recovery in the second half of the year, and our Recharge range of electrified cars puts us in a strong position to meet the emerging trends we're seeing.

What’s really interesting is that while some automakers got extremely nervous during the first half of the year, Volvo has managed to turn the Pandemic situation into a bit of extra confidence:

" This pandemic has strengthened our confidence that our strategic ambitions are the right ones and that an accelerated transformation of our business will lead to long-term growth. We will continue to focus on and invest in electrification, online sales, and connectivity."
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So, what’s next for Volvo? Well, 69-percent of the company’s sales in the first half of this year came from the XC40, XC60, and XC90 SUVs, while the V estate range and S saloon range combined to make up the remaining 31-percent. So, you can imagine that the next steps will include pushing the brand’s SUVs deeper into EV territory with the sedans and wagons coming in as a second thought sometime down the road.

Robert Moore
Robert Moore
Editor-in-Chief and Automotive Expert - robert@topspeed.com
Robert has been an auto enthusiast his entire life. He started working cars at a young age, learning the basics from his father in the home garage on the weekends. As time went on, Robert became more and more interested in cars and convinced his father to teach him how to drive when he was just 13 years old. Robert continued working on cars in his free time and learned as much as he could about engines, transmissions, and car electrical systems, something that only fed his curiosity more and eventually led him to earn a bachelors degree in automotive technology with a primary focus on engine performance and transmission rebuilding.  Read full bio
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