The Swedish carmaker says it is ready to phase out the internal combustion engine and produce greener vehicles. The firm will manufacture only fully electric and hybrid models within two years.
Described as one of the most significant moves by any carmaker towards the production of electric vehicles, Volvo said on Wednesday that all models launched from 2019 would be fully plug-in or hybrid models.
"This announcement marks the end of the solely combustion engine-powered car," Volvo Chief Executive Hakan Samuelsson said in a statement, amid what he said was increasing consumer demand for electric cars.
The Gothenburg-based manufacturer plans to introduce five electric models before 2021 - three of them Volvos, and two released under the company's performance brand Polestar. They will be accompanied by several Volvo hybrid models that offer both electric and traditional petrol engine technology.
"This means that there will in future be no Volvo cars without an electric motor," the company said.
Volvo said it hopes to sell one million electric vehicles by 2025.
The decision means Volvo becomes the first major traditional automaker to set a date for the complete phase-out of combustion-engine-only models, although Elon Musk's Tesla Motors has been a pure-play battery carmaker from its launch in 2003.
Since it was bought by Zhejiang Geely Holding Group from Ford Motor Co. in 2010, Volvo has invested heavily in new models and plants, establishing a niche in a premium auto market dominated by larger rivals such as Daimler's Mercedes-Benz and BMW.
Part of its strategy has also been to embrace emerging technologies which allow higher performance electric vehicles as well as, eventually, self-driving cars.
Last month, the company said Polestar would become a standalone brand that would compete with the likes of Tesla in producing high-performance electric vehicles.
Volvo recently mooted an initial public offering (IPO) and has already raised 5 billion Krona (0.5 billion euros, $0.59 billion) from Swedish institutional investors to support its plans. A date for the IPO has still not been confirmed.
mm/rd (dpa, Reuters)