Volvo Cars CEO Håkan Samuelsson stated that due to the rapid decline in battery costs and the introduction of new production technologies, electric vehicles will become cheaper than their internal combustion engine (ICE) counterparts by 2031. Speaking at a briefing in Stockholm on February 4, the head of the Swedish brand emphasized that the price gap between different types of powertrains is narrowing much faster than previously expected. This was reported by UNN.
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Samuelsson named the transition to cheaper battery chemistry, particularly lithium iron phosphate (LFP) cells, and new assembly methods as the main factors in reducing the cost of "green" cars. In next-generation models, such as the upcoming EX60 crossover, Volvo is implementing the integration of batteries directly into the body's power structure and using mega-casting to produce large parts of the chassis. These steps significantly reduce the vehicle's weight and production costs.
"If you look five years ahead, an electric car will most likely be cheaper than an internal combustion engine car."
He also warned the industry against expecting "breakthrough" solid-state batteries, emphasizing that existing lithium-ion technologies still have huge potential for cost optimization.
Profitability of Volvo's electric lineup
Unlike many competitors who are currently incurring losses from selling electric cars, Volvo is already reporting profitability for its electric portfolio.
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Samuelsson emphasized that the company does not use aggressive discounts to gain market share but focuses on the margin of each unit. According to him, without electric vehicles, Volvo's overall profit would be lower due to lower sales volumes in the premium segment.
Despite optimistic price forecasts, the automaker maintains a flexible approach to full electrification. Although Volvo previously planned to abandon ICEs by 2030, the current strategy involves a gradual transition, focused on infrastructure development and real consumer demand in different regions of the world.