Volvo shifts its strategy: plug-in hybrids, the XC70 and a possible EREV future

Only a few years ago, Volvo’s chief executive, Håkan Samuelsson, was laying out a route to full electrification by 2030. That plan is no longer the one the brand intends to follow. Speaking to Automotive News Europe, Samuelsson said: “We need a second generation of plug-in hybrids that will serve us until the end of the 2030s.”

Volvo’s electrification plan is being pushed back

Samuelsson argues that Volvo will still need to sell cars with internal combustion engines through to the end of the next decade (which ends in 2040), largely because that is where customer demand remains. In his view, buyers must decide when they are ready to move to fully electric vehicles: “we cannot force it,” the executive said.

A revised 2030 target driven by market reality

This is Samuelsson’s second spell as Volvo’s chief executive. It was he who, in 2021, set the target of becoming fully electric by 2030. His successor, Jim Rowan, had already indicated last year that this objective would be dropped and replaced with a more achievable goal: by 2030, 90% of sales will be electrified vehicles (electric and hybrid).

Since returning to lead the Swedish manufacturer, Samuelsson appears less bullish than when he left the company in 2022. He points out that uptake of electric vehicles differs significantly from one market to another.

Extending the life of Volvo plug-in hybrids (XC90 and XC60)

As a result, Volvo’s current approach is to keep its plug-in hybrid models on sale for longer. Recent updates underline that direction, with the XC90 refreshed last year and the XC60 updated this year.

Volvo XC70: focus on plug-in hybrids

These models were not expected to have their lifecycles extended-let alone to receive a new generation. Their plug-in hybrid powertrains deliver electric-only ranges of around 70–80 km, but Samuelsson wants to go further.

The second generation of plug-in hybrids he says Volvo needs is intended to put much greater emphasis on the electric side, as seen with the new XC70 (the cover image), which was unveiled recently.

Developed with the Chinese market in mind, the plug-in hybrid SUV claims an electric range of 200 km (CTLC cycle). Even allowing for conversion to the WLTP cycle used in Europe, it should still be capable of roughly doubling the electric range offered by today’s XC60 and XC90. A very large 39.6 kWh battery is central to that figure.

Volvo has already confirmed that the XC70 will be sold in Europe, but it will not arrive quickly. Asked when it might land, Samuelsson acknowledged that 2026 would be early. “It will take some time,” he said, adding that Volvo’s ambition is to “bring it to Europe as quickly as possible”.

The brand’s CEO explains the delay by pointing to the fact that the “Chinese” XC70 cannot use the same infotainment system in Europe-here, Volvo uses a Google-based platform that differs from the system used in China. On top of that, the SUV is not currently compliant with European emissions and safety regulations.

EREV in the future?

While second-generation plug-in hybrids are a certainty at Volvo, the next step could be the introduction of electric vehicles with a range extender-EREV-Samuelsson told Automotive News Europe.

Unlike plug-in hybrids, EREVs are essentially electric vehicles in which the electric motor is the only source of drive (connected to the wheels). The combustion engine’s sole role is to generate electricity. The Mazda MX-30 R-EV is one example of this kind of electric car, as is the new Leapmotor C10 REEV.

EREVs are becoming increasingly popular in China and could be the next major focus for European manufacturers, particularly in mid-range and higher-end segments where premium brands such as Volvo compete.

However, that direction may depend heavily on what the European Union decides about its 2035 emissions targets, which are set to be tightened to a 100% reduction. That shift would effectively ban the sale of new cars with combustion engines.

The EU will review the rules again this year, and industry representatives are pressing for an exemption so that plug-in hybrids and/or electric vehicles with range extenders can continue to be sold after 2035. But there is opposition-from car-producing countries such as France and Spain, and from organisations including Transport & Environment (T&E), which warn about the risks of these types of powertrain.

T&E says that range-extender EVs are not free of the same pitfalls as plug-in hybrids, with studies showing that, in the “real world”, they can emit up to 8.5 times more CO₂. The argument is that they are not charged as often as intended and therefore rely far more on the combustion engine to get around.