Volvo chief executive Håkan Samuelsson says electric vehicles (EVs) will “most probably” cost less than petrol cars within five years, as the Swedish automaker claims its current EV lineup is already turning a profit.
Speaking to reporters during a briefing in Stockholm, Samuelsson said “I think if you look five years ahead I would say an electric car will most probably be lower in cost than a combustion car.”
The prediction comes as Volvo positions itself against competitors struggling with EV profitability, including Ford which recently reported significant losses on its electric vehicle push.
“Our company’s more profitable now as we have EVs,” Samuelsson said, adding that “if we did not have EVs we would be less profitable.”
The CEO explained that while Volvo’s EVs currently operate on slimmer margins than petrol vehicles, the additional volume compensates for the reduced per-unit profit. “So far, our present electric cars have a lower margin, I think, that’s no secret, but they are profitable,” he said.
Crucially, Samuelsson emphasised that Volvo is not selling EVs at a loss. “We are not paying to get them,” he said, referring to building and selling electric cars without profit.
Manufacturing innovations driving cost reductions
Volvo’s confidence in future cost parity stems from new manufacturing methods being introduced with models like the 2027 EX60. The automaker is implementing cell-to-body integration and mega castings, alongside in-house developed motors.
Samuelsson said these manufacturing changes will improve margins and bring cost parity between electric models like the EX60 and their petrol counterparts. While the larger EX90 doesn’t yet match the profit margins of the petrol-powered XC90, it remains profitable.
The CEO highlighted the efficiency gains from direct cell integration into the vehicle body, describing traditional battery packaging as inefficient. “If you put in the battery in an extra aluminium box and the battery modules are is also in a battery box, so you have, like, a Russian doll,” he said.
“Now we put the cells directly into the body of the vehicle, that is going to bring down the cost,” Samuelsson explained.
Battery technology and cost outlook
While acknowledging that solid-state batteries are often considered the “holy grail” of EV technology, Samuelsson cautioned against waiting for future breakthroughs. “There is always a grass greener on the other side, but I think if you wait for that you probably will not be in the market anymore,” he said.
Instead, Volvo is focusing on improvements to current battery technology, including a shift toward lithium iron phosphate (LFP) chemistry which offers lower raw material costs despite some range compromises.
“Do you need these expensive, NMC batteries? I mean, it will be more LFP, lower raw material cost in those batteries, and sacrificing a bit on the range, but on the range, you will reach a level where you stop talking about it, and then you could instead lower the cost,” Samuelsson said.
The comments suggest Volvo believes range anxiety will become less relevant as charging infrastructure improves, allowing manufacturers to prioritise cost reduction over maximum range.
For Australian consumers, Volvo’s predictions could signal more affordable EV options in the coming years, particularly as the local market continues to expand and charging infrastructure develops across the continent.
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