Swedish automaker Volvo Cars scrapped its target of going all electric by 2030 on Wednesday, saying it now expected to still be offering some hybrid models in its lineup at that time.
Major automakers have seen slowing demand for electric vehicles (EVs) partly due to a lack of affordable models and the slow roll-out of charging points, while also bracing for the effects of European tariffs on electric cars made in China.
Shares in the company were down 7.5% at 1416 GMT, after hovering around 4% lower ahead of the announcement of scaled-back targets.
Volvo Cars said in the statement that by 2030 it now aimed for between 90% and 100% of cars sold to be fully electric or plug-in hybrid models, while up to 10% would be so-called mild hybrids, where electric power only supplements the combustion engine.
The automaker said in a separate statement that plug-in hybrids would be a critical part of its future profit growth, and that it would revamp its hybrid XC90, with first customers receiving the SUV by the end of the year.
Volvo Cars sells a mix of electric and hybrid cars, and had until now remained steadfastly committed to its plans to only sell fully electric cars by 2030 even as its rivals began scaling back their ambitions. Some of Volvo’s flagship fully electric cars are the EX90 and the EX30, both SUVs.
Growing demand for hybrid cars has prompted a strategic shift across a sector that had initially aimed to phase out hybrids in favour of fully electric vehicles.
Toyota, one of the slowest major automakers to develop EVs, continues to bet strongly on hybrids with an increased number of models.
French automaker Renault said that it would continue to launch hybrid model.
Drivers’ concerns about EVs driving ranges are among the reasons buyers have gravitated towards the often more affordable and convenient hybrids.
Volvo Cars, which is majority-owned by China’s Geely, said it was responding to changing market conditions and customer demands.
Read more: Global eMobility transition “politically divided”: What are the causes and consequences?
