Volvo plug-in hybrids, XC70 and EREV: the updated strategy

A few years ago, Volvo chief executive Håkan Samuelsson set the brand on a path to become fully electric by 2030. That is no longer the route Volvo intends to take. “We need a second generation of plug-in hybrids that can take us through to the end of the 2030s,” the executive told Automotive News Europe.

Now serving his second stint as Volvo CEO, Samuelsson was the person who, in 2021, established the target of total electrification by 2030. His successor, Jim Rowan, had already indicated last year that this objective would be dropped and replaced with a more achievable goal: by 2030, 90% of sales will be electrified vehicles (battery-electric and hybrid).

Since returning to the helm of the Swedish manufacturer, Samuelsson sounds less bullish than when he left the company in 2022. He points out that EV uptake differs greatly from one market to another.

For that reason, Samuelsson argues Volvo will still need to sell vehicles with internal combustion engines into the next decade (which runs to 2040), largely because of customer demand. In his view, it has to be buyers who decide when they are ready to move to 100% electric cars: “we can’t impose that,” he said.

In practical terms, Volvo’s updated approach is to keep its plug-in hybrid models in production for longer. Recent updates to the XC90 last year and the XC60 this year illustrate that direction.

Volvo XC70: doubling down on plug-in hybrids

These models were not meant to have their lifecycles extended - let alone to receive an all-new generation. Their hybrid drivetrains offer electric-only ranges of around 70–80 km, but Samuelsson is looking for more.

The second-generation plug-in hybrids he says Volvo requires are expected to give the electric side a far bigger role, as seen with the newly unveiled XC70 (the cover image).

Developed with China in mind, the plug-in hybrid SUV claims an electric range of 200 km on the CTLC test cycle. Even once that figure is translated to the WLTP cycle used in Europe, it should still deliver roughly double the electric-only range of today’s XC60 and XC90. A large 39.6 kWh battery is a major contributor to that result.

Volvo has already confirmed the XC70 will come to Europe, but not quickly. Asked when it would arrive, Samuelsson conceded that 2026 would be too soon. “It will take some time,” he said, adding that Volvo’s ambition is to “bring it to Europe as fast as possible”.

The brand’s CEO says the delay is down to the fact that the same infotainment setup used in the “Chinese” XC70 cannot be carried over - in Europe, Volvo uses a Google-based system that is different from the one deployed in China. On top of that, the SUV does not currently meet European emissions and safety regulations.

EREV in the future?

While second-generation plug-in hybrids are a certainty for Volvo, the next move could be the introduction of electric vehicles with a range extender - EREVs - as Samuelsson also told Automotive News Europe.

Unlike plug-in hybrids, EREVs are essentially electric cars in which the electric motor is the only source of drive (and is connected to the wheels). The combustion engine’s sole job is to generate electricity. The Mazda MX-30 R-EV is one example of this kind of electric vehicle, as is the new Leapmotor C10 REEV.

EREVs are gaining momentum in China and could become the next major focus for European carmakers, particularly in the mid and upper market segments where premium brands such as Volvo operate.

However, any such push may depend heavily on what the European Union decides regarding the 2035 emissions targets, which are set to be tightened to 100%. That change would effectively mean a ban on the sale of new cars with combustion engines.

The EU will review the rules later this year, and industry representatives are seeking an exemption that would allow plug-in hybrids and/or range-extender EVs to continue being sold after 2035. But there is opposition, including from car-producing countries such as France and Spain, and from organisations like Transport & Environment (T&E), which warn about the risks associated with these powertrains.

T&E argues that range-extender EVs are not immune to the same pitfalls as plug-in hybrids. Studies, it says, show that in “real-world” use they can produce up to 8.5 times more CO₂ emissions. The issue is linked to vehicles not being charged as often as intended and therefore relying much more heavily on the combustion engine for day-to-day driving.