Volvo intends to phase out all vehicles powered solely by fossil fuels, shifting toward a lineup consisting exclusively of electric and hybrid vehicles.
The company says that, starting with new models in 2019, only hybrid or full-electric motors will be available. Existing Volvo models will continue to offer combustion engine versions until the generation dies—typically around seven years. Thus, by 2025 the automaker could be producing zero full-gasoline cars.
While most traditional automakers offer hybrids and/or fully electric vehicles, Volvo is now the first incumbent brand to commit to a full phasing-out of combustion engine rides.
Hakan Samuelsson, the company’s chief executive, stated that “Volvo’s brand will be strengthened by electrification.”
Roughly one quarter of cars sold globally by 2025 will be hybrid or electric, according to an estimate from Goldman Sachs Group. Reinforcing this, BMW expects 25% of its sales to hail from battery-powered vehicles by 2025. However, BMW also notes that profit margins have decreased as a result of increased investment in electric.
Tesla, which makes only fully electric cars, plans to produce 500,000 units in 2018 and one million in 2020. Demand for the company’s lineup is sizeable but Tesla has not yet turned a profit.