In 2023, Volvo sold a total of 2,423 cars, of which 690 were electric vehicles.
As a player in the mainstream luxury car market, Swedish automaker Volvo Cars India aims to leverage the strong demand for electric vehicles (EVs) in the high-end market segment. In the emerging yet rapidly expanding EV market, Volvo Car India, with its two electric models, the XC40 and C40, ranked as the second-largest EV brand in 2023, trailing behind BMW Group India and slightly ahead of Mercedes Benz India.
As stated by Jyoti Malhotra, Managing Director of Volvo Car India, electric vehicles accounted for approximately 28% of Volvo Cars’ total sales in 2023. This figure is expected to increase to 33% in 2024.
Malhotra explained that their goal is to be among the leaders in the EV market, as they anticipate significant growth in the luxury car segment. Despite having a market share of less than 5% in the traditional luxury car segment, which is dominated by internal combustion engines, Volvo managed to secure over 24% of the market share in the electric vehicle segment of luxury cars. The company sold 690 electric vehicles in 2023, contributing to a total of 2,423 car sales, marking a 31% growth.
Electric vehicle adoption in the luxury car market is outpacing that of the mass car market, driven by factors such as a broader range of models, wealthier consumers, and better access to charging infrastructure.
Electric vehicle penetration in the luxury car market has reached 7%, significantly higher than the mainstream market. Malhotra estimates that by the end of the decade, about 50% of luxury car sales will be EVs. He expects this penetration to increase to 10% within the next two years. To maintain market excitement, the company may introduce new variants of existing EV models with smaller battery packs at competitive prices, along with the first full-year sales of the C40 EV, which will contribute to incremental sales.
The adoption curve is expected to accelerate further with the introduction of two new models in 2025: the entry-level EX30 and the top-of-the-line EX90, which will help the brand achieve over 50% EV contribution in the next two years.
Malhotra added that this year, they anticipate one-third penetration and believe that with more car lines coming in 2025, the penetration will increase further. He believes that similar to the mainstream market, the growth rate for the luxury car market will likely adjust to 8-10% in 2024 after three consecutive years of strong double-digit growth.
Given the early stage of the electric vehicle segment, Volvo Cars has opted to sell directly to consumers, with dealerships playing a crucial role in delivering a superior ownership experience to prospective EV buyers by addressing their anxieties and questions. With the positive reception of direct EV sales to consumers, the company might consider a direct sales model for traditional internal combustion engine vehicles in the coming years.
Looking ahead, Malhotra expects the growth momentum of electric vehicle contributions to continue, with 100% of sales coming from electric vehicles by the end of the decade, aligning with the brand’s global commitment.
India has been the fastest-growing market for the Swedish automaker in the Asia Pacific region. As the company explores new manufacturing bases beyond China, the US, and Sweden, India is considered a potential production and export base for the future.
