Volvo Cars India, a player in the mainstream luxury car industry, plans to capitalise on the rising demand for electric cars (EVs) in the high-end market segment. Volvo Car India, with its two electric models, the XC40 and C40, is projected to be the second-largest EV brand in 2023, trailing only BMW Group India and slightly ahead of Mercedes-Benz India.
According to Jyoti Malhotra, Managing Director of Volvo Car India, electric vehicles would account for around 28% of the company’s total sales in 2023. This proportion is predicted to climb to 33% by 2024.
Malhotra stated that their goal is to be among the leaders in the EV market, citing strong growth in the premium car class. Despite having a market share of less than 5% in the traditional luxury automobile class, which is dominated by internal combustion engines, Volvo was able to gain more than 24% of the market share in the electric vehicle segment. The company sold 690 electric vehicles in 2023, adding to a total of 2,423 automobile sales, a 31% increase.
Electric vehicle adoption in the luxury car industry is surpassing that of the mass car market, thanks to a wider selection of models, wealthier consumers, and superior charging infrastructure.
Electric vehicle adoption in the premium automotive market has reached 7%, which is much greater than in the mass market. According to Malhotra, by the end of the decade, electric vehicles will account for around half of all luxury automobile sales. He anticipates this penetration to reach 10% within the next two years. To keep the market interested, the firm may release new variants of existing EV models with smaller battery packs at competitive pricing, as well as the first full-year sales of the C40 EV, which will add to incremental sales.
The adoption curve is set to accelerate further with the arrival of two new models in 2025: the entry-level EX30 and the top-of-the-line EX90, which will enable the brand achieve more than 50% EV contribution in the coming two years.
Malhotra went on to say that they expect one-third penetration this year and that with new car lines coming in 2025, penetration will climb even further. He expects that, like the mainstream market, the luxury car market’s growth rate will likely slow to 8-10% in 2024, following three years of robust double-digit growth.
Given the early stage of the electric vehicle category, Volvo Cars has chosen to sell directly to consumers, with dealerships playing an important role in providing a better ownership experience to prospective EV purchasers by answering their concerns and inquiries. Given the excellent reception of direct EV sales among consumers, the business may pursue a direct sales strategy for classic internal combustion engine automobiles in the next years.
Looking ahead, Malhotra anticipates electric vehicle contributions to continue growing, with electric vehicles accounting for 100% of sales by the end of the decade, in line with the brand’s global commitment.
India has been the Swedish automaker’s fastest-growing market in the Asia-Pacific region. As the corporation looks for new manufacturing sites beyond China, the United States, and Sweden, India is viewed as a potential production and export base in the future.
