Volvo CEO: Price parity between electric and combustion cars by 2025

Volvo car Chief Executive Officer Jim Rowan said he expects the brand’s electric vehicles to reach the same price point as models powered by internal combustion engines within the next two to three years.

“We think we get [to price parity] … around 2025, when there will be enough technology to reduce battery costs,” he said European Automotive News.

“Technology will drive scope. Less battery, more range, at a lower cost — we’ll get there.”

Volvo aims to achieve a battery pack cost of $100 per kilowatt hour (kWh) by 2025-26. CATL-derived lithium iron phosphate battery in Tesla Model 3 is currently the world leader in affordability according to a recent analysis, with a cost of $131 per kWh.

Mr. Rowan made statements of impending price parity as Volvo tackles rising raw material costs, specifically citing lithium in its third-quarter presentation to investors.

Volvo CEO’s view of equality is in contrast to Renault CEO Luca de Meo, who said last month“I don’t see this parity approaching.”

He points out that the cost of raw materials is one of the biggest obstacles to lowering the price of electric vehicles, noting that they account for 80% of the cost of batteries.

“I could come up with better battery chemistry and better power electronics, but these benefits will be wiped out when the price of cobalt doubles in just six months,” de Meo said.

However, given Volvo’s premium positioning, its buyers are less likely to be price-sensitive than those of Renault, which sells a wide range of small cars and entry-level crossovers.

The company’s upcoming sub-XC40 electric crossover, recent teasingcould target more price-sensitive buyers, although there are no plans to offer a version powered by an internal combustion engine.

Mr. Rowan also noted that the new crossover could be offered on a subscription basis to customers.

European Automotive News note that, while some materials costs have increased, the overall price of batteries has fallen by 80 to 90 percent over the past 12 years – though naturally demand for batteries will increase greatly as There are many car manufacturers involved in the field of electric vehicles.

Currently, Volvo sells only one vehicle in Australia with both an internal combustion engine and a pure electric motor: XC40.

$20,000 separates the petrol-powered Plus B4 base model and the most affordable electric model, the Recharge Pure Electric.

However, these two variants do not have the same level of equipment, with the EV receiving additional equipment compared to the Plus B4.

Volvo plans to exclusively sell electric vehicles by 2030 worldwide, but its Australian division announced earlier this month an ambitious plan to Stop selling combustion cars in 2026.

According to a report from auto news Earlier this year, sub-XC40 crossover and New EX90 will also be joined by a power XC60 Instead, an SUV sits between the XC60 and EX90, along with a sedan and two wagon-like “operating vehicles”.

In addition to announcing his targets for price parity, Mr. Rowan also criticized electric vehicle manufacturers who depend on government subsidies.

“There is no way any company has to rely on government subsidies to be successful,” he said.

THAN: Volvo Australia will only run on electricity from 2026