Fully electric cars will make up 50 per cent of Volvo sales by 2025.
Volvo hopes to sell most of these cars to China which is set to become the world’s biggest market for electrified cars.
The Chinese Government plans to have “new-energy” vehicles account for more than 20 per cent of the country’s annual car sales by 2025, which equates to more than seven million vehicles, based on forecasts.
“Last year we made a commitment to electrification in preparation for an era beyond the internal combustion engine,” Volvo CEO, Håkan Samuelsson, said.
“Today we reinforce and expand that commitment in the world’s leading market for electrified cars. China’s electric future is Volvo Cars’ electric future.”
Volvo currently produces the S90 and S90L T8 Twin Engine in China.
This week marks the start of production for the XC60 T8 Twin Engine, which means that soon all three of Volvo’s Chinese plants – Luqiao, Chengdu and Daqing – will produce either plug-in hybrid or battery electric cars.
To underline its commitment to this ambitious plan Volvo is displaying only plug-in hybrids at the Beijing Auto Show.
Beijing also marks the first public appearance for the T5 plug-in hybrid version of the new XC40.
Recently crowned 2018 European Car of the Year, the XC40 has already amassed more than 60,000 orders globally, even though Volvo is yet to open order books in China.
The early success of the XC40 supports Volvo’s expectations of strong demand for its new small SUV in China.
These expectations are also underpinned by growth forecasts for the segment over the next five years, as well as a growing middle-class population and China GDP growth trends driven by domestic consumption.
China is Volvo’s largest individual market and this year delivered a 23.3 per cent first-quarter sales increase, contributing to the company’s first-quarter global sales growth of 14 per cent.
Volvo car sales in China last year passed 100,000 units for the first time.