Volvo CEO: Worth parity between electrical and combustion automobiles by 2025

Volvo Vehicles CEO Jim Rowan says he expects the model’s electrical automobiles to achieve value parity with its combustion-powered fashions inside the subsequent 2-3 years.

“We predict we get [to price parity] … round 2025, the place there’ll be sufficient know-how that’s driving down price on the battery,” he advised Automotive Information Europe.

“Know-how will drive vary up. Much less batteries, however extra vary, at much less price — we’ll get there.”

Volvo goals to achieve battery pack prices of $100 per kilowatt hour (kWh) by 2025-26. The CATL-sourced lithium iron phosphate battery within the Tesla Mannequin 3 is presently the worldwide chief in affordability based on a latest teardown, with a value of $131 per kWh.

Mr Rowan made these claims of imminent value parity as Volvo offers with rising uncooked materials prices, citing lithium particularly in its third-quarter presentation to buyers.

The Volvo CEO’s view on parity stands in distinction with Renault CEO Luca de Meo, who stated final month, “I don’t see this parity getting shut”.

He singled out the price of uncooked supplies as being one of many largest handicaps to reducing EV pricing, noting they account for 80 per cent of the price of a battery.

“I can provide you with higher battery chemistry and higher energy electronics, however these features can be erased when the value of cobalt doubles in simply six months,” stated de Meo.

With Volvo’s premium positioning, nevertheless, its patrons are much less prone to be price-sensitive than Renault’s, which sells a variety of mainstream small automobiles and crossovers.

Its upcoming sub-XC40 electrical crossover, teased just lately, might goal extra price-sensitive patrons, although there aren’t any plans to supply a combustion-powered model.

Mr Rowan additionally famous the brand new crossover may very well be provided on a subscription foundation to prospects.

Automotive Information Europe notes that, whereas some materials prices have elevated, the general value of a battery has plunged 80 to 90 per cent over the previous 12 years – although, naturally, there’s much more demand for batteries as extra automakers enter the EV house.

At present, Volvo sells only one automobile in Australia that’s out there with each combustion energy and pure electrical energy: the XC40.

$20,000 separates the petrol-powered Plus B4 base mannequin and probably the most inexpensive electrical mannequin, the Recharge Pure Electrical.

Nevertheless, these two variants don’t function the identical degree of apparatus, with the EV receiving extra tools over the Plus B4.

Volvo plans to completely promote electrical automobiles by 2030 worldwide, however its Australian division introduced earlier this month an formidable plan to stop combustion automobile gross sales domestically in 2026.

Based on a report from Automotive Information earlier this yr, the upcoming sub-XC40 crossover and new EX90 will even be joined by an electrical XC60 alternative, an SUV to fit between the XC60 and EX90, plus a sedan and two wagon-like “exercise automobiles”.

Along with saying his targets for value parity, Mr Rowan additionally criticised EV producers reliant on authorities subsidies.

“There’s no manner that any firm ought to be counting on authorities subsidy to achieve success,” he stated.

MORE: Volvo Australia going EV-only from 2026