The boss of Chinese-owned Swedish brand Volvo has said consumers can expect electric vehicles (EVs) to cost less than equivalent petrol and diesel vehicles around 2030–31.
“I think if you look five years ahead, I would say an electric car will most probably be lower in cost than a combustion car,” the automaker’s CEO, Håkan Samuelsson, told media at a briefing in Gothenburg, Sweden.
As reported by The Drive, Mr Samuelsson went on to explain the company is already making a profit on EVs, despite pulling back on previous plans to exclusively offer EVs from 2030, as well as huge losses from fellow Geely-owned Polestar, the now EV-only brand he was chairman of from 2017-2024.
“So far, our present electric cars have a lower margin, I think, that’s no secret, but they are profitable,” Mr Samuelsson said, adding the company hasn’t needed to resort to price cuts or incentives to find EV buyers: “We are not paying to get them”.
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According to the International Energy Agency (IEA), EVs can carry an average price premium of as much as 45-50 per cent above the list price of equivalent internal combustion engine (ICE) vehicles, though this varies depending on incentives, tariffs and other factors.
In some segments and markets, such as small city-sized vehicles in China, price parity between ICE and EVs has already been achieved, according to IEA data – but not across the automotive industry as a whole.
In Volvo Australia showrooms, the petrol-hybrid XC40 starts at $54,990 before on-road costs, while the cheapest version of its electric counterpart, the EX40, is $76,990 before on-roads.
The Volvo chief’s comments come as a raft of automotive brands have also pulled back on plans to go EV-only, with the rising popularity of hybrid models key to maintaining profitability for many automakers.
The Volvo EX60 electric SUV – a Tesla Model Y rival due in Australia later this year with up to 810km (WLTP) of range, more than any current competitor – was unveiled in January, with prices in Europe matching those of the hybrid-powered, similarly sized Volvo XC60 SUV. Australian pricing is yet to be announced.
Ford, which owned the Swedish brand from 1999 before selling it to current owner Geely 11 years later, has suffered financial losses in the billions on its EV programs, with multiple EV projects cancelled or postponed.
The IEA has also pointed to falling battery costs as a key factor in reducing EV showroom prices, but Volvo said there’s further opportunity to lower battery costs – and that the much-touted gains of solid-state batteries are still some way off, despite some automakers’ claims.
Toyota, for example, told CarExpert last year it expected to offer solid-state batteries – which it claims will be cheaper to produce, more energy efficient, offer greater range from a smaller unit, and faster charging – as soon as 2028.
“There is always a grass greener on the other side, but I think if you wait for that you probably will not be in the market anymore,” said Mr Samuelsson.
“Everything gets better, but you cannot wait for it, wait for the ideal car. You have to be in business and learning. Right now, I think it’s a long, long wait for solid-state batteries to come, and there’s a lot of potential to lower the cost of today’s batteries.”