Volvo: Parity on EV, Piston Car Margins by 2025

Volvo Cars is “absolutely sure” its profit margins on electric cars to equal those for its internal combustion-powered vehicles by 2025, CEO Hakan Samuelsson tells Reuters.

But Samuelsson adds that those margins probably won’t be as good as those generated by the company in 2015 because EVs cost more. By 2025, he says, margins on piston-powered models are likely to shrink, presumably because it will become increasingly expensive to make such powertrains meet future emission standards.

Volvo isn’t alone. Reuters says the global auto industry has declared some $300 billion worth of spending on EV technology over the next 5-10 years, but carmakers predict a squeeze on profits until consumer demand for such vehicles builds momentum.

Volvo has said it is spending about 5% of its revenue to develop EVs and autonomous vehicle technologies.