A Volvo logo is displayed at the Volvo Cars Hill Country dealership in Austin, Texas on September 4, 2024.
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European car giants face a host of challenges on the road to full electrification, including a lack of affordable models, a slower-than-expected rollout of charging stations and the potential impact of European tariffs on Chinese-made electric vehicles.
Volvo Cars announced on Wednesday it had abandoned its heavily promoted plan to sell only electric cars by 2030, citing the need to be “pragmatic and flexible” in changing market conditions.
The Swedish automaker said it currently aims to have 90% to 100% of its vehicle sales be pure electric or plug-in hybrid models by 2030. mild hybrid model.
Volkswagen and several other automakers in crisis, including Ford and Mercedes-Benz Group have both announced plans to delay previous targets to phase out sales of internal combustion engine cars in Europe.
“I think a lot of manufacturers are obviously going through this process [of delaying electrification targets] at the moment. We’re seeing this across the industry.
“A lot of manufacturers who have stopped investing in internal combustion engine technology have started to realize that if we don’t continue to invest, we’re not going to be competitive and we’re not going to really have that product in the showrooms that people want to buy,” he said. added.
Urquhart said governments in major markets had taken steps to encourage the purchase of battery electric vehicles (BEVs) and set mandatory targets – He described the trend as “a growing problem.”
For example, the UK has introduced a regulation requiring 22% of new car sales this year to be zero-emission vehicles (ZEV). The directive aims to reduce the number of polluting vehicles on the road and will increase year by year until it reaches 100% of new car sales in 2035.
“Both regulators and manufacturers need to adopt a certain pragmatism. Manufacturers may be ahead of regulators on this issue,” Urquhart said.
He added: “Manufacturers are the only ones who know what customers want to buy right now, and there are not as many electric vehicles as everyone expected.”
‘Collective over-enthusiasm’
When Volvo Cars announced its revised electric car plans last week, it laid out a series of challenges facing the auto industry’s electrification ambitions.
The automaker said a slower-than-expected rollout of charging infrastructure, the removal of government incentives in some markets and recent EV tariffs in various markets created additional uncertainty.
Volvo Cars said the developments showed that “stronger and more stable government policies” were still needed to support the transition away from fossil fuels.
A Volkswagen ID4 electric car charges at a charging station in the car park of the Autostadt in Wolfsburg. Volkswagen AG invites shareholders to attend its annual shareholder meeting.
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Asked on Monday whether some of these industry challenges might be a disincentive to buy electric vehicles, Urquhart responded: “Well, I mean that’s the point.”
“There seems to be news about anti-EV sentiment in the mainstream media every day, and a lot of it is not particularly well-researched… but a lot of it is factual,” Urquhart said.
“Consumers are faced with a very, very difficult choice. For 130 years, they’ve been using the same technology paradigm in the industry, and we’re asking consumers to revolutionize the way they drive their vehicles, use their vehicles, charge them, rather than fill them up with gas. ,” he continued.
“I think there’s some collective overzealousness on the part of regulators, [original equipment manufacturers]For pure electric vehicles, maybe from our perspective, the same is true in some aspects. Without really understanding that it would be very, very difficult to get most mainstream consumers to completely change the way they use and operate their vehicles.
“Non-linear journey”
However, analysts made it clear that despite the short-term uncertainty, automakers realize they cannot afford to miss out on electric vehicles and the direction remains clear.
“As we have seen over the past few years, the transition to electric vehicles is a non-linear process with many uncertainties. But this is putting increasing pressure on European car manufacturers, and Total new car sales in Europe have failed to return to pre-pandemic levels.
Luhmann said the decision by some European automakers to delay the switch to electric vehicles was “largely an attempt to preserve profitability and maintain flexibility in a highly uncertain environment.”
He added that there are multiple reasons for the slowdown in EV sales in the West and that it is likely to be temporary.
“The way forward has not changed and investments in product portfolio revamping are still needed to ensure a long-term position in the market over the next decade,” Luhmann said in a note released on Friday.
