Volvo increases its sales of plug-in hybrids

The Swedish firm sets its sixth consecutive sales record in 2019, with strong demand for plug-in hybrid models

Volvo sold a record number of cars last year, with company sales surpassing 700,000 for the first time, and company bosses say the growing demand for plug-in hybrid models means it is on track to avoid having to pay CO2 emissions fines in the European Union in 2020.

The company sold 705,452 cars last year, compared with 642,253 in 2018 and the sixth consecutive year in which the Swedish company reached a new sales record. Of those sales, European sales rose 7.2% to 341,200, while sales in China rose 18.7% to 154,961. In the United Kingdom, Volvo reached its highest sales figure since 1990, with 56,316 cars sold.

These sales resulted in revenue of 22 billion, an increase of 8.5% on 2018, with operating profit rising 0.8% to 1.14 billion euros.

Will the future of Volvo be PHEV?

As with other car makers, Volvo has been working intensively to electrify its range, and with the imminent launch of the XC40 Recharge Plug-In Hybrid T5, it will offer a PHEV version of every model. A total of 45,933 plug-in hybrids were sold during the year, led by the V60 and S60, up 22.9% on 2018. Plug-in hybrids accounted for 18% of Volvo models sold in Europe in December.

Notably, 15,594 of the company’s plug-in hybrid sales took place during the last three months of the year, led by strong demand in European markets for the XC60 and XC90. The company also launched the new Recharge brand, which will include all its electric and full-electric models.

Volvo says it has secured additional battery capacity from partners CATL and LG Chem to increase production of plug-in hybrid models and that, combined with the arrival later this year of the XC40 Recharge Pure Electric T8, will help it avoid fines by reaching the European Union’s average fleet CO2 targets.

Carla De Geyseleer, Volvo’s chief financial officer, said the growth in the company’s plug-in hybrid sales meant the company was confident that “we will meet our emissions targets in Europe for 2020.” Volvo expects PHEVs to account for 20% of total sales this year, and De Geyseleer added that “we are not planning to pay fines of any kind.”

The electric XC40 will be the first of five full-electric vehicles that Volvo will launch by 2025, and Volvo chief Håkan Samuelsson said the company has secured battery capacity from CATL and LG Chem “to ensure that half of our production cars can be fully electric by 2025.”

By 2025, Volvo aims to reduce its total carbon footprint by 40%, including a 50% reduction in CO2 emitted by a vehicle over its lifetime and 25% reductions in CO2 production from Volvo’s manufacturing and operations.

Samuelsson reaffirmed that the company has made sustainability “something we will work to achieve for security.” We have very clear targets to meet, and to meet them we must act now.”

The XC60 remains Volvo’s best-selling model, with 204,981 reaching buyers in 2019, an increase of 8.4%. Demand for the XC40 rose sharply, with 139,847 sold, a year-on-year increase of 84.4%. The XC90 was the company’s third best-seller, with 100,729 sales.