Volvo Cars’ aggressive effort to become fully electric by the end of this decade is expected to expand the company’s US operations significantly in the coming years, according to the president and CEO of Volvo Cars USA.
Anders Gustafsson told Yahoo Finance Live that Volvo planned to double or triple the size of its South Carolina plant to meet growing demand for electric vehicles.
“We had 100% growth [in the U.S.], in the past five years, and we are planning another 100 in the years to come, ”he said. “We will move from a very low production capacity to the largest capacity ever in the US market. Therefore, we need to recruit more colleagues, more resources. “
The Chinese-owned Swedish brand has set an ambitious goal of selling only electric cars by 2030, when it unveiled its second battery-only model, the C40 Recharge, on Tuesday. While this model will be manufactured in Ghent, Belgium, Volvo’s next generation EV, the SUV XC 90, will be manufactured in South Carolina for the United States market, said Gustafsson.
The company’s announcement comes as rival automakers accelerate their transition to electric. General Motors (GM) recently announced its goal of selling only emission-free vehicles by 2035, while Ford (F) aims to be fully electric in Europe by 2030.
Volvo’s EV target is by far the most aggressive, as the company has only delivered a fully electric vehicle to the market to date. She expects half of the cars she sells to be fully electric by 2025, with the other half to be hybrid.
“It is very difficult to be number one or to be good at two tasks at the same time. That is the reason why we will leave the development of combustion engines and we will concentrate fully on all of our engineers in electrification ”, said Gustafsson. “This is a very, very competitive industry.”
As part of its change in strategy, Volvo’s EVs will only be available for sale online. In a statement, the company said it would invest heavily in its online sales channels and “radically reduce complexity” in its product offering. Although the company has been selling cars online since 2016, as part of its Care by Volvo subscription, it plans to expand its digital services to include sales, insurance, maintenance and roadside assistance.
“The most important thing for us is to do what our customers are asking for,” said Gustafsson, adding that the company was simply “taking away the harmful part of our business.”
Vehicle electrification has accelerated as automakers and drivers seek to break away from fossil fuels to address the urgency of climate change. Adoption was particularly significant in Europe, which recently overtook China as the largest EV market in the world. Sales of battery-powered vehicles more than doubled in the region last year, according to Schmidt Automotive Research.
Much of this growth has been attributed to aggressive government incentives. Although the adoption of EV in the US lagged behind China and Europe, Gustafsson said that Volvo would not rely on incentives to accelerate sales in the country.
“We cannot conduct our operations with the support of governments. I think they should help us with the loading infrastructure and we made it very clear that we need help, ”he said. “To be competitive, you need to work efficiently, reduce sales costs and that is why we are so focused on online.”
The ads on Tuesday came just days after Geely dismissed plans to merge with Volvo and instead focus on electric and autonomous driving technology.
Akiko Fujita is an anchor and reporter at Yahoo Finance. Follow her on twitter @AkikoFujita