The car maker blamed changing market conditions for its decision to give up a target it had announced only three years ago.

Car company Volvo has abandoned its target to produce only fully electric cars by 2030, saying it now expects to be selling some hybrid vehicles by that date.

The carmaker blamed changing market conditions for its decision to give up a target it had announced only three years ago.

It comes as the industry faces a slowdown in demand in some major markets for electric vehicles (EVs) and uncertainty due to the imposition of trade tariffs on EVs made in China.

Volvo, which has traditionally flaunted its environmental credentials, joins other major carmakers General Motors and Ford in rowing back on EV ambitions.

Volvo now expects at least 90% of its output to be made up of both electric cars and plug-in hybrids by 2030.

The Swedish company may also sell a small number of so-called mild hybrids, which are more conventional vehicles with limited electrical assistance.

'Transition will not be linear'

"We are resolute in our belief that our future is electric," said Jim Rowan, chief executive of Volvo.

"However, it is clear that the transition to electrification will not be linear, and customers and markets are moving at different speeds."

The company also said the business climate for EVs had changed, due to factors such as a slow rollout of charging infrastructure and the withdrawal of consumer incentives.

Independent equity analyst Anna McDonald said consumers still had concerns about switching to EVs.

“Some of the subsidies that governments had put in place to encourage electric car purchases have ended and also there’s just that ongoing lack of demand because consumers are worried about charging," she told the BBC's Today programme.

“It still remains the case that electric cars remain more expensive.

"While the EU and the US are putting tariffs on Chinese cars that are imported to stop them kind of swamping the market, that just means that vehicles have to be made outside China which is more expensive in themselves.

"Car manufacturers are not keen to start making a loss on these vehicles," Ms McDonald added.

Registrations of EVs across the European Union dropped by nearly 11% in July, according to the European Automobile Manufacturers Association.

Volvo is majority-owned by Chinese car giant Geely and because it uses factories in China, it will also be affected by tariffs on imports of Chinese-made EVs in Europe and North America.

Last week, Canada announced it was imposing a 100% tariff on imports of China-made electric vehicles, after similar announcements by the US and the EU.

Western countries have accused China of subsidising its EV industry, giving its car makers an unfair advantage.

China has rejected those allegations and criticised the tariffs as "discriminatory".

Ford has also been scaling back on its EV ambitions. Just last month, the US car giant announced it was scrapping plans for a large, three-row, all-electric sport utility vehicles (SUVs) and postponing the launch of its next electric pick-up truck.

Its rival General Motors has also been cutting EV production goals in the last year.

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Volvo Cars scales back margin and revenue ambitions

Swedish automaker Volvo Cars slashed its margin and revenue ambitions for a second time in a year on Thursday, a day after it abandoned its EV-only target as the impact of tariffs and reduced demand for electric vehicles continue to hurt.

Slowing demand for EVs, partly due to a lack of affordable models, as well as the effects of EU, U.S. and Canadian tariffs on electric cars made in China have made market conditions increasingly difficult for automakers.

Volvo Cars, which is majority-owned by China's Geely, lowered its target for operating profit margin excluding joint ventures and associates to 7-8% from above 8%.

It also scrapped a sales goal of 550 billion-600 billion Swedish crowns ($53.5 billion-58.4 billion), instead saying it expected to outgrow the premium car market.

It cited "increased complexity especially in relation to global trade and tariffs".

This is the second time in a year that Volvo has walked back margin and revenue goals, after stepping away in January from a target for annual EBIT of between 8-10% and sales of 1.2 million cars annually by mid-decade first announced in 2021.

"The sharpened business ambitions we announce today further reinforce our commitment to drive value as a business, while remaining true to our purpose," CEO Jim Rowan said in a statement.

"As I have said before - business is not a game of perfection, it's about continuous progress and adaptation," he added.

Shares in Volvo Cars were up 3% at 0744 GMT, having fallen on Wednesday as the company lowered its electric vehicle car sales ambition. Year-to-date, shares are down 10%.

In releases ahead of a planned investor event in Gothenburg, Volvo said that starting with its flagship electric EX90 model - which the Swedish automaker will begin delivering to customers this month - it will have a single "technology stack" for all car models.

Volvo Cars said separately it will use a single software system backed by powerful chips from Nvidia for all future models and will rely on "megacastings" - massive presses to make large single-piece aluminium vehicle underbodies - to cut costs for electric cars.

Chief Engineering & Technology Officer Anders Bell said that through the use of megacasting, Volvo will be able to increase the use of recycled aluminium and cut emissions throughout its supply chain.

It also reported separately on Thursday a 3% year-on-year increase in car sales in August.

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