We declare the end of diesel at Climate Week NYC – our last diesel car will be built in early 2024

By 2030 we plan to sell only fully electric cars and by 2040 we aim to be a climate neutral company. That clear roadmap towards all-out electrification represents one of the most ambitious transformation plans of any legacy car maker.

To underline our commitment to those ambitions, today at Climate Week NYC we announce the end of production of all diesel-powered Volvo Car models by early 2024. In a few months from now, the last diesel-powered Volvo car will have been built, making Volvo Cars one of the first legacy car makers to take this step.

This milestone follows our decision last year to exit the development of new combustion engines. In November of 2022 we sold our stake in Aurobay, the joint venture company that harboured all of our remaining combustion engine assets. We’re no longer spending a single krona of our R&D budget on developing new internal combustion engines.

“Electric powertrains are our future, and superior to combustion engines: they generate less noise, less vibration, less servicing costs for our customers and zero tailpipe emissions,” says Jim Rowan, our chief executive. “We’re fully focused on creating a broad portfolio of premium, fully electric cars that deliver on everything our customers expect from a Volvo - and are a key part of our response to climate change.”

An urgent need for action

We’re all-in on electrification because it’s the right thing to do. The recent Global Climate Stocktake report issued by the United Nations underlined the urgency of the climate emergency faced by humanity, as well as the need for action.

“What the world needs now, at this critical time for our planet and humanity, is leadership,” says Jim Rowan. “It is high time for industry and political leaders to be strong and decisive, and deliver meaningful policies and actions to fight climate change. We’re committed to doing our part and encourage our peers as well as political leaders around the globe to do theirs.”

To further emphasize this point, our chief sustainability officer Anders Kärrberg will attend an event organized by the Accelerating to Zero (A2Z) Coalition at this year’s Climate Week NYC. Launched at the COP27 climate summit, the A2Z Coalition provides a multi-stakeholder platform for signatories of the Glasgow Declaration on Zero Emission Vehicles, of which we are one.

The A2Z platform allows us to collaborate and coordinate actions with others towards the coalition’s collective target of ‘making 100 percent of global new car and van sales free of tailpipe emissions by 2040, and no later than 2035 in leading markets’.

While our own electrification target is more ambitious than that, we hope to inspire other companies to be bolder in taking action against climate change through today’s announcement on diesels and by taking part in the A2Z discussions and other gatherings at Climate Week NYC.

A changing outlook

Our decision to completely phase out diesels by early 2024 illustrates how rapidly both the car industry and customer demand are changing in the face of the climate crisis.

Only four years ago, the diesel engine was our bread and butter in Europe, as was the case for most other car makers. The majority of cars we sold on the continent in 2019 were powered by a diesel engine, while electrified models were only just beginning to make their mark.

That trend has largely inverted itself since then, driven by changing market demand, tighter emission regulations as well as our focus on electrification. The majority of our sales in Europe now consists of electrified cars, with either a fully electric or plug-in hybrid powertrain.

Less diesel cars on the streets also has a positive effect on urban air quality; while diesels emit less CO2 than petrol engines, they emit more gases such as nitrogen oxide (NOx) that have an adverse effect on air quality especially in built-up areas.

Significant investments

It's our ambition to sell 50 percent fully electric cars by mid-decade and only fully electric models by 2030.

But electrification is not enough. For example, even when a fully electric Volvo C40 is charged using climate neutral energy, our lifecycle assessment shows it would still be responsible for 27 tonnes of CO2 emissions over its lifetime. That means reducing emissions through material production and refinement is key to reaching our short-term targets and our long-term climate ambitions.

To address emissions from steel, aluminum and batteries, we’re actively working to set tougher requirements on our suppliers, to find new and better ways to produce these materials and to increase the share of recycled content.

Those ambitions and actions are supported by significant investments in new technologies and manufacturing capabilities. Through investments in our operations in Europe, China and the US, we’re actively preparing our manufacturing network for an all-electric future, while also increasing the use of climate-neutral energy in our global operations from around 66 percent already today.

In Slovakia we plan to construct a new car plant that will build only fully electric cars, while we’ve also made significant investments in our existing plants to enable the production of fully electric cars. In Sweden, will also build a brand-new battery plant powered entirely by climate neutral energy, in collaboration with Northvolt, the leading Swedish battery firm.