Volvo: Margins on EVs, Conventional Vehicles Equal by 2025

Volvo has a bold prediction – the Swedish carmaker expects its margins on electric vehicles and combustion engines to be roughly equivalent by 2025. And it’s not that far-fetched.

“I would be absolute sure we will have the same margins with electric cars as we will with conventional combustion cars in 2025,” Volvo Chief Executive Hakan Samuelsson told Reuters.

Note that he said “margins” and not “sales.”

Volvo’s first all-electric car, the Polestar 2, should hit the streets this year, for a total of four new EVs from 2019-2021, and the company wants EVs to make up 50% of sales by 2025.

Meanwhile, global plug-in vehicle deliveries rose to 2.1 million units in 2018, a 64% leap from 2017. The biggest patron by far was China, which reported 1.2 million EV sales, good for 56% of the worldwide total.

Still, the global EV market share is only 2.1%, as of 2018, so plenty of work remains.

Volvo cites reduced battery costs and declining margins on conventional vehicles as the primary drivers in converging profits. And given the wild EV gains over the last 5-10 years, it seems plausible that margins could be equal by 2025.