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Volvo Cars sees ‘tremendous growth’ in EVs, CEO says
Global Banking & Finance Review®
Company
By Divya Chowdhury and Savio Shetty
DAVOS, Switzerland (Reuters) -Volvo Cars remains confident of “tremendous growth” in the electric vehicles market, CEO Jim Rowan told the Reuters Global Markets Forum in Davos on Wednesday, countering gloomier projections from rivals.
The carmaker, which aims for electric vehicles (EVs) to contribute half its sales volume by mid-decade and to sell only EVs by 2030, said the growth in demand for its premium brand was stronger than that of mass-market rivals.
“We have much more pricing power and people have got more disposable income so they can afford it if they want to drive an EV,” Rowan said.
The Volvo Cars CEO said that, in contrast to others, he saw good growth globally for electric cars, with particular strong demand in Europe.
Over the past year, many automakers have warned that the anticipated growth of EVs has been slow to emerge due to poor demand, heavy price cuts, lower subsidies, and supply chain issues.
Volvo has previously said that it has no intention of participating in the Tesla-ignited price war due to its position as a premium brand and saw good margins on its electric cars.
Higher costs caused by disruptions on shipping in the Red Sea would also not affect customers, the CEO said, who stated that any additional costs would be absorbed by Volvo.
Last week, Volvo said it would halt production at its factory in Belgium for three days as a result of a delivery of gearboxes being delayed due to the disruption.
The CEO also told Reuters that he had high ambitions for India in the next five years with plans to launch the more affordable EX30 there in 2025.
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(Reporting by Divya Chowdhury in Davos and Savio Shetty in Mumbai, writing by Marie Mannes, editing by Stine Jacobsen, Terje Solsvik, Elaine Hardcastle)
An electric vehicle (EV) is a type of vehicle that is powered by electricity instead of traditional fuels like gasoline or diesel. They are known for being more environmentally friendly.
Market demand refers to the total quantity of a product or service that consumers are willing and able to purchase at a given price level during a specific time period.
Pricing power is the ability of a company to raise prices without losing customers. It often reflects the company's brand strength and market position.
Production challenges are obstacles that manufacturers face in the process of producing goods, which can include supply chain disruptions, labor shortages, and material costs.
A premium brand is a brand that is perceived to offer superior quality, features, or service, and is often priced higher than competing brands.
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