Volvo Cars’s aggressive efforts to become fully electric by the end of this decade are expected to expand the company’s US operations significantly in the next few years, according to the President and CEO of Volvo Cars USA.
Anders Gustafsson told Yahoo Finance Live that Volvo planned to double or triple the size of its manufacturing facility in South Carolina to meet the growing demand for electric vehicles.
“We have had 100% growth [in the U.S.], the last five years, and we plan another 100 in the coming years, he said. “We will go from fairly low production capacity to the highest capacity ever in the US market. That is why we need to recruit more colleagues, more resources. ”
The Chinese-owned Swedish brand set an ambitious goal of only selling electric cars before 2030, as it presented its second battery-based model, the C40 Recharge, on Tuesday. While that model will be manufactured in Ghent, Belgium, Volvo’s next generation EV, XC 90 SUV, will be manufactured in South Carolina for the American market, says Gustafsson.
The company’s announcement comes as competing carmakers accelerate the transition to electricity. General Motors (GM) recently announced its goal of selling emission-only vehicles by 2035, while Ford (F) aims to become fully electric in Europe by 2030.
Volvo’s EV goal is by far the most aggressive, given that the company has only delivered a complete electric vehicle to the market to date. It is expected that half of the cars sold will be fully electric by 2025, while the other half will be hybrids.
“It is very, very tough to be type number one or be good at two tasks at the same time. That is the reason why we will leave the development of internal combustion engines and go for a full focus on all our engineers for electrification, says Gustafsson. “This is a very, very competitive industry.”
As part of the strategy change, Volvo’s electric cars will only be sold online. In a statement, the company said it will invest heavily in its online sales channels and “radically reduce the complexity” of its product offering. While the company has been selling cars online since 2016, as part of the Care by Volvo subscription, it plans to expand its digital services to include sales, insurance, maintenance and roadside assistance.
“The most important thing for us is to do what our customers ask for,” Gustafsson said, adding that the company simply “removed the unhealthy part of our business.”
The electrification of vehicles has accelerated as car manufacturers and drivers seem to break with fossil fuels to deal with urgent climate change. The adoption has been particularly important in Europe, which recently took China as the largest electricity market in the world. Sales of battery-powered vehicles more than doubled in the region last year, according to Schmidt Automotive Research.
Much of that growth has been attributed to aggressive government incentives. While the EV adoption in the US has lagged behind China and Europe, Gustafsson said that Volvo would not rely on incentives to accelerate sales in the country.
“We can not run our business based on government support. I think they should help us with the infrastructure for charging and we have been very clear that we need help, he said. “To be competitive, you have to work with efficiency, you have to reduce sales costs, and that’s why we’re so focused on the web.”
The announcements on Tuesday came just days after Geely scrapped plans to merge with Volvo and instead focus on electric and autonomous driving technology.
Akiko Fujita is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AkikoFujita