Volvo to be Australia’s first fully electrified auto brand

Volvo will become the first local auto brand to only sell electrified vehicles from July, when it releases its first EV in the Volvo XC40 Recharge and its first all-hybrid model line in the facelifted MY22 XC60.

The same month will see the new Volvo V60 Cross Country released with a single mild-hybrid powertrain, and other model lines including the S60 sedan also reduced to a single electrified variant with one option and drive-away pricing, as part of a slimmer model range.

Standard V60 wagon variants and the V90 Cross Country have already been axed, and Volvo will only offer mild-hybrid, plug-in hybrid or full-EV versions of the XC40, XC60 and XC90, replacements for all of which are due in coming years.

Globally, Volvo has promised seven new EVs over the next seven years, including the all-new Volvo C40 Recharge (due here by early 2022) and a smaller all-electric SUV/coupe expected to be called the C20 Recharge and on sale by 2025. By then, Volvo expects half of its sales to be battery-powered ‘Recharge’ vehicles.

Excluding its all-electric sister brand Polestar, which is due for launch here in early 2022, the Swedish car-maker says every vehicle it sells will be an EV by 2030.

New Volvo Car Australia managing director Stephen Connor says that could happen here even sooner, following the successful phasing out of diesel models.

“It is a bold statement from us and it is a really exciting statement,” Connor told carsales.

“In Australia we’ve been subtly moving away from diesels without too much fuss over the course of the last two years and that’s been deliberate. We knew this point was coming.

“We didn’t know how bold the statement was going to be and we certainly didn’t know we were going to have one new model every year for the next seven years. But we knew the company was moving away from traditional ICE cars and diesel cars.

“We didn’t announce it too heavily to the dealer network, because dealers need time to prepare and get themselves ready for the future. And also we still had a job to do to sell the current stock that was coming through.

“So we had to move our dealers away from diesels and we did that successfully over the past two years.

“By the end of March, outside 60 cars arriving on a late boat, all of our diesels will be completely gone from the network, and we will focus our dealers on mild-hybrid, plug-in hybrid and battery-electric vehicles.

“Every model coming from July will be mild-hybrid, plug-in hybrid or pure battery-electric. We will be the first car brand to be fully electrified in Australia.”

Further afield, Volvo Car Australia is confident it can be a 100 per cent EV brand even sooner than its parent company’s 2030 target – without government subsidies.

“We want to be one of the first adopters – not because that makes a nice noise in the press but because we actually believe in the strategy,” he said.

“We’re ready to go. We actually want to push the [EV] strategy quite hard in Australia. You can’t sell diesels over here and make big noises about electrification over there. It just doesn’t work like that in terms of the public messaging.

“I reckon 2030 is a timeline we know we can achieve … I think we’ll get there a lot sooner than 2030. I think you’ll see Volvo become a pure electric vehicle company probably as soon as 2025 or 2026, so it’s an exciting time.”

Connor said VCA’s smooth transition away from diesel vehicles over the past two years (its sales were static in a depressed 2020 market and are up more than 36 per cent so far this year) proves Volvo’s EV strategy won’t necessarily reduce sales.

“The great thing is over that two-year period you’d expect our sales to dip because 80 to 90 pent of XC90s are no longer diesels,” he said.

“Actually we’re selling more XC90s today without diesels than we were two years ago when we had diesels, so the silent strategy of evolving ourselves has really worked and our customers haven’t really seen much of a difference.”

Volvo’s local chief said in the medium term, the Scandinavian brand is targeting a two per cent market share, which would equate to about 20,000 annual sales – up from 7700 in 2020.

“Around the globe we’re already running at about a two per cent market share in most markets. Volvo [Australia] I believe has underperformed for a long period of time and in the last three years we’ve gone from 0.35 per cent market share to one per cent.

“I don’t believe a two per cent share is unreasonable to ask for given the fact that’s how we perform around the world.

“We’re predicting growth for the next three years. That growth has got to come from new models as well – we can’t always expect to grow from the existing model base – but with a brand-new model arriving on these shores every year for the next seven years I think that will bring incremental volume, and added to the EV strategy we’ve got an opportunity to get ahead of the game and that will get us to the two per cent market share.

“I don’t think that will be today or tomorrow. I think in about three years we’ll be closer to a two per cent market share, but we won’t push volume at the expense of profitability.”

Connor said VCA’s first EV, the Volvo XC40 Recharge, will be well placed to take advantage of SUV demand in Australia, where 70 per cent of Volvo’s sales are already SUVs.

An initial shipment of 160 vehicles is due in July and close to 600 sales are expected in the second half of 2021, bringing the brand’s EV sales mix to 20 per cent.

Simultaneously, the facelifted MY22 Volvo XC60 will arrive with the choice of mild-hybrid and PHEV powertrains, new front and rear styling borrowed from the 2020 C40 Recharge and interior upgrades including the same new Android operating system from the XC40 Recharge, featuring Google Maps, Google Assistant, the Google Play Store and over-the-air updates.

In Europe, 2.0-litre turbo-petrol powertrain options include mild-hybrids outputting 145kW/300Nm, 184kW/350Nm and 220kW/420Nm, and PHEVs including the 251kW/590Nm Recharge T6, 288kW/640Nm Recharge T8 and 298kW/670Nm Recharge T8 Polestar Engineered.

What’s coming from Volvo:
XC60 facelift – July
XC40 Recharge – July
V60 Cross Country – July
C40 Recharge – early 2022
XC90 redesign – 2022
XC60 redesign – 2023
XC40 redesign – 2024
C20 Recharge – 2025