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Volvo Cars India targets 80% of sales from EVs by 2025, studying local assembly of BEVs

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As the move towards electrification gains momentum, Swedish luxury car maker Volvo Cars India has firmed up a plan to take a lead in the space by garnering 80% of its total sales from battery operated electric vehicles by 2025.

To keep prices competitive, the company has additionally commenced a study to evaluate opportunities to commence localisation of full electric vehicles in the country.

Volvo – which unveiled its first full electric car XC40 in the capital today – has set itself a vision of selling one million electrified vehicles by 2025, and India is expected to be a key contributor to that. To this end, the company plans to launch one electric vehicles in the country every year for the next five years. For now, the bookings for the electric version of XC40 will begin in June 2021. Deliveries will start from October this year.

In his first interview after taking charge, Volvo Cars India Managing Director Jyoti Malhotra told ET, “Volvo globally has plans fo go full electric by 2030. We can do it much faster in India. We will bring one electric vehicle to the country every year. By 2025, the aim is that 80% of our sales should come from full electric vehicles.”

What is interesting is that the company expects the penetration of electric vehicles sales in overall volumes in India to be much higher than the global penetration of 50% by 2025. “Luxury will take the lead in full electrification. We had earlier expected the plug-in hybrid to be a bridge to full electrification, but with strong government intent, we expect the shift towards complete electrification much faster. There is a growing consciousness towards the environment from a potential luxury car buyer. The path is laid, the move towards electrification will only accelerate”, explained Malhotra.

The first Indian to take charge of Swedish cars operation said price barrier and range anxieties are two big factors which have impeded penetration so far, but the company’s internal study suggests that it not much of an issue for a luxury car buyer. The owner of a luxury vehicle has other cars too with him, hence the acceptance would be much faster.

“Our customers usually own multiple cars and can opt for another vehicle when they want to travel long distance. They have dedicated parking spaces to install chargers at home or work place. Our customer is making a choice to contribute to the environment by purchasing an electric vehicle, there is increased acceptance in the market”, said Malhotra.

Malhotra said given the emphasis on electrification in the company’s overall growth strategy, there is a case for the localisation of electric vehicles long-term. “In the long-run, we see the need for doing the same (read completely knocked down unit operations) for electric vehicles, as with ICE (internal combustion engine) vehicles. We have commenced a study for localisation of electric cars”, he informed.

In India, the company is already phasing out diesel powertrain and sees its portfolio moving towards petrol and electrified vehicles within the next 12-But even as the shift towards electrification starts, Volvo is not losing sight of volume growth. Mid-term, the company is expecting to double its volumes to about 3000 cars by the end of 2022. To boost numbers, Volvo Cars India will launch four new cars in 2021. These include S60, all the new S90, XC-60 and all electric XC-40 in October.

Malhotra says the luxury car market has remained depressed for over two to three years and he is expecting a strong bounceback in demand and sentiment has turned very positive now. “India has a lot of potential for future growth. HQ believes in India’s growth story. We will continue to launch new products and we will continue to localize more models. We currently assemble three products, we will be adding S60 to local assembly later in the year and the study for local assembly of XC-40 all electric is already underway,” added Malhotra.

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