The head of a Chinese-owned Swedish brand Volvo has stated that consumers can expect electric vehicles (EVs) to cost less than equivalent gasoline and diesel vehicles between 2030 and 2031.
“I think if you look five years into the future, I would say that an electric car will most likely be cheaper than a combustion car,” the automaker’s CEO Håkan Samuelsson told media at a briefing in Gothenburg, Sweden.
As reported by The driveMr. Samuelsson further explained that the company is already making a profit from electric vehicles, despite having withdrawn previous plans to offer only electric vehicles from 2030, and recording huge losses at Polestar, also part of Geely, the now electric-only brand of which he was chairman from 2017 to 2024.
“So far, our current electric cars have a lower margin, I think that’s no secret, but they are profitable,” said Samuelsson, adding that the company did not have to resort to price cuts or incentives to find electric car buyers: “We don’t pay to get them.”
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According to the International Energy Agency (IEA), electric vehicles can carry an average price premium of up to 45-50 percent over the list price of equivalent internal combustion engine (ICE) vehicles, although this varies depending on incentives, tariffs and other factors.
According to the IEA, price parity between combustion engines and electric vehicles has already been achieved in some segments and markets, such as small city vehicles in China – but not across the entire automotive industry.
In Volvo Australia showrooms, the petrol hybrid XC40 starts at $54,990 off-road, while the cheapest version of its electric counterpart, the EX40, costs $76,990 off-road.
The Volvo boss’s comments come at a time when a number of car brands have also backed away from their plans to go electric-only, with the increasing popularity of hybrid models crucial to maintaining profitability for many automakers.
The Volvo EX60 electric SUV – a rival to the Tesla Model Y that launches in Australia later this year and has a range of up to 810km (WLTP), more than any current competitor – was unveiled in January, with pricing in Europe matching that of the hybrid-powered, similarly sized Volvo XC60 SUV. Australian prices are yet to be announced.
Ford, which owned the Swedish brand since 1999 before selling it to current owner Geely 11 years later, has suffered billions of dollars in financial losses on its electric vehicle programs as several electric vehicle projects were canceled or postponed.
The IEA has also pointed out that falling battery costs are a key factor in driving down show prices for electric vehicles. But Volvo said there are other ways to reduce battery costs – and that the much-touted benefits of solid-state batteries are still a long way off, despite what some automakers claim.
Toyota, for example, said Daily Sparkz Last year, the company expected to offer solid-state batteries as early as 2028 – which it claims would be cheaper to produce, more energy efficient, offer longer range in a smaller unit and faster charging.
“There is always greener grass on the other side, but I think if you wait for it you will probably be out of the market,” Mr Samuelsson said.
“Everything is getting better, but you can’t wait for it, wait for the ideal car. You have to be in the business and learn. Right now, I think it’s a long, long wait for solid-state batteries, and there’s a lot of potential to reduce the cost of today’s batteries.”
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