Volvo Steers Clear Of Ford And Tesla’s Electric-Car Price Battle

The top executive at Volvo Cars stated on Thursday that the Swedish automaker has no plans to reduce the cost of its electric vehicles (EVs), despite Tesla, the market leader, making a similar move that has prompted others to do the same.

Jim Rowan, the chief executive of Volvo, said there was no need to lower prices because there was still strong demand for the company's vehicles and a healthy order backlog for its full EVs. His comments came after the Swedish automaker reported a lower fourth-quarter profit. According to Volvo's results statement, EV unit sales tripled in the fourth quarter, and fully electric vehicle sales increased to 18% of total sales from 6% the year prior.

"We don't see (price cuts) at this point in time," Rowan told Reuters. "Demand for our (battery electric vehicles) is the highest that we've ever seen, the backlog for that as well."

"We don't have any intention to reduce pricing."

Tesla cut the price of its electric vehicles by up to 20% last month. Price reductions are anticipated to affect EV startups more so than well-known brands, such as American company Rivian.

Companies with an all-EV focus, such as Polestar, which is owned by Volvo Cars and its majority shareholder, Chinese automaker Geely Holding, were also perceived as being more impacted than those with a mixed range of vehicles.
Ford Motor has already reduced the cost of its SUV Mustang Mach-E by up to US$5,900, following Tesla's example.

However, due to increased costs for raw materials and logistics, German automaker BMW has increased the retail price for some of the models it sells in China.

CEO of American EV manufacturer Fisker, Henrik Fisker, told Reuters he also has no plans to lower prices, arguing that the EV startup's cars were already competitively priced. "I think we already priced our cars well," Fisker said, adding that the carmaker hadn't changed the price of its cars since 2020, while rivals had raised prices several times.

According to a Thursday Financial Times report, other automakers like Volkswagen, Hyundai, Kia, and General Motors would also refrain from lowering prices.

Suppliers are concerned they might have to lower their prices to compete with Tesla in addition to automakers. Some suppliers claim they have not yet noticed an increase in EV production despite the price reductions.