Volvo Australia to go all-EV by 2026

Volvo has announced it will only sell electric vehicles in Australia from 2026 as it looks to boost its market share and take advantage of booming interest in EVs.

The aggressive EV-only timeline cuts at least four years off a global edict from the Swedish brand to stop selling vehicles powered by internal combustion engines (ICE) by 2030.

The move is all about positioning Volvo, which became Australia’s first fully electrified auto brand in 2021, as an early EV mover – and a brand that can tackle the mostly unchallenged electric car might of Tesla.

“We see an opportunity in our marketplace today – I think our consumers are ready for this,” said Volvo Car Australia managing director Stephen Connor in announcing the 2026 plan to become an EV-only brand.

“You can’t lie with the facts that the Australian consumer is now looking for change.”

Connor said Volvo has “got the demand” for EVs and he wants to satisfy it with new models.

“We’ve agreed on a local level in Australia, we’re not going to wait until 2030. I put a proposal to Gothenburg the other day and we will be full electric in Australia by 2026.”

Volvo says the imminent EV shift – which could be completed by late 2025 if stock arrives in time – means no more new ICE vehicles for Australia.

It’s all about wholly embracing the move to EV.

“Everything we do now is pointing towards 2026,” said Connor.

Volvo says it will introduce one new EV each year for the next five years, covering the core of its model range with all-electric replacements for the XC40, XC60 and XC90, as well as sedans and wagons such as the S60 and V60.

“We will still be focusing on our core models… but we’ll see new models… they will be fully electrified.”

One of the first will be the Volvo EX90, the all-electric seven-seat replacement for the XC90.

The new nomenclature is expected to be adopted across the Volvo EV range, with the likes of the EX40 and EX60 likely in future.

But the Scandinavia company says it will not bring in any more new models powered by internal combustion engines, even hybrids or plug-in hybrids.

“There’s no point in launching any combustion engines for us,” said Connor. “There may be a little bit of crossover [between EV and ICE] but again we’ll have to work through that when we get there.”

Instead, Volvo will continue selling the existing line-up – XC40, XC60, XC90, S60 and V60 Cross Country – until an EV replacement arrives.

Connor says the current XC60 will be the last ICE vehicle the company sells in Australia, with plans for the final versions to be sold by the end of 2025.

A facelift of the XC90 is due within a year or two to extend the life of the current model, but Connor would prefer not to take it, instead focusing on the battery-powered EX90 that will eventually replace it globally.

“We will decide whether we want a reskin of the XC90,” he said.

Part of the inspiration for Volvo’s early jump to EVs is the sales success of Tesla.

The American EV pioneer is now fighting among the top 10 selling brands in Australia for outright sales and in recent months has comfortably been the top selling prestige marque in the country.

Connor has been closely watching Tesla’s progress.

“I love Tesla,” he said. “They’ve revolutionised the way we think, they’ve done all the heavy lifting. We’re going to piggyback off the back of the good work that they’ve done.”

He says Volvo currently has the third best selling EV in the market – the XC40 Pure Electric, behind the Tesla Model 3 and Tesla Model Y – and that all of these EVs can co-exist.

“I don’t see our customers comparing our cars with theirs. In the BEV market I see them as a competitor… they’ve done a great job… they’ve changed the way people think about battery-electrics and that’s actually going to help us.”

Despite the occasionally cult-like following for the EV brand, Connor believes many buyers will start comparing electric cars from other manufacturers as they become available.

And he says safety will continue to be the focus for Volvo.

“We’re always going to be aligned with safety… let Tesla be the tech company, let us be a tech company but in a different way.”

Key to the aggressive Volvo EV shift is a plan to double sales.

Last year Volvo sold 9028 vehicles, accounting for about one per cent of the market. In an EV-only environment Connor sees that doubling.

“I’m planning that in 2026 we will sell 20,000 units, two per cent market share and be fully electric.”

He believes manufacturers holding on to petrol and diesel engines could be left behind in the EV rush.

“The ones that are still tinkering with diesel, all the old ICE cars, I think they’re the manufacturers that will be really struggling,” said Connor, adding that he thought some had not accurately read the accelerating shift to electric.

“If you don’t understand consumer sentiment you will get lost and left behind, which is why we’re going early.”

He also believes the Volvo announcement could have some rethinking their strategies.

“I also think some of our competitors will hear this and they will start to pull their plans forward,” said Connor. “I think this will be a race to get there.”

For Volvo, the rapid EV ramp-up kicks off within months.

Volvo has just launched its C40 Recharge (pictured) – the company’s first car that will not be available with an ICE – and it plans to sell big numbers of the XC40 EV in 2023.

While many brands are struggling to convince their head offices to send cars to Australia due to a lack of CO2 regulations, Connor says Sweden is on board for building the EV market Down Under.

The local Volvo boss says the company has secured 1550 C40s and 3450 XC40 EVs for 2023. That would make about one-third of the brand’s sales EV by next year.

Connor says the brand’s recent growth has been “mainly coming from Pure Electric”, so he wants to capitalise on the interest.

It’s also about getting ahead of the competition.

“I think the market will be really crowded by 2030,” said Connor. “The acceleration of change is happening so fast, it will only get faster.

“If we wait to 2030, I think we lose the march on our competitors. If we go in 2026 we will gain market share, we will get the early adopters.”

The shift to EV will also require a rethink of the dealer model, something Connor is aware of.

Electric vehicles have less intensive servicing requirements and often only need to be checked every two years, reducing the frequency people revisit a dealership.

To encourage EV owners back more often, Volvo says it will offer free charging across its 40-odd dealers.

“Next year we will make sure that every one of our retailers has a fast-charger,” said Connor. “Everyone will have a fast-charger, which will be free to every customer.”

The plan is to offer charging all day – even when a dealership is closed – although Connor concedes that won’t be feasible at all locations for security reasons.

When the dealership is open, owners will also be offered a free coffee while their vehicle is charging – and, no doubt, a quick update on the new vehicles on the showroom floor.

Volvo is also looking at partnerships to allow easier public charging, something it plans to announce in 2023.

The other part of the Volvo EV expansion is a move into vehicle subscriptions. Connor sees the potential to offer some consumers access to EVs on a short-term basis.

That would not only introduce people to what is still relatively fresh technology but also provide another revenue stream and a part of the business that could be partially run through dealerships.

He says subscriptions is “something we’re looking at at the moment” and that it could also involve “ride share or Uber or a version of that”.

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