Volvo Car just made its last-ever diesel vehicle

STOCKHOLM: Volvo Car AB produced its last car with a diesel engine this week, ending an era for the manufacturer that plans to only make electric vehicles by 2030.

The XC90 sport utility vehicle rolled off the line at the Torslanda plant in Sweden on Tuesday evening. Volvo Car is phasing out the technology just as global demand for electric vehicles is cooling, though it’ll still make cars with gasoline engines.

"We are quite confident that we have very good customer offers even without the diesel,” Erik Severinson, a Volvo Car executive in charge of new cars and operations strategy, said in an interview.

Other automakers have been strategically noncommittal about when they will phase out combustion engines, and some have backtracked on EV targets.

Mercedes-Benz Group AG last month pushed back its sales forecast for the technology, and now expects battery-powered vehicles to be stuck at less than half of its sales for longer than anticipated. Late last year, Audi said it’s paring back its EV rollout.

In 2017, Volvo Car became the first major automaker to commit to phasing out vehicles powered solely by fossil fuels and has since introduced several hybrid and fully electric models.

In the brand’s main market Europe, diesel cars peaked nine years ago, at around half of new sales.

They slumped to 14% of registrations last year.

The XC90 was key to the carmaker’s revival starting in 2014, when it was unveiled as the first car built on new underpinnings developed under the stewardship of Geely’s Li Shufu.

Volvo Car will display the last XC90 made at a Volvo museum opening next month in Gothenburg. The top-line SUV has an electric sibling, the EX90.

Marketed by Europe’s automakers as a cleaner alternative to gasoline, diesel had a successful run in the early years of the century. But demand cratered after Volkswagen AG admitted in 2015 that it fitted its diesel engines with software to cheat on emissions tests.

Meanwhile, electric-car makers in Europe are fighting over market share amid waning subsidies and intensifying competition from Tesla Inc. and Chinese brands.

Volvo Car has been cutting costs and pulling back from funding Polestar, an unprofitable EV manufacturer that’s part of parent Geely’s automotive holdings, to deal with the pressures.

While Volvo Car will continue to support its diesel customers and offer spare parts, it’s not slowing on EVs as the technology still offers more growth in the long term, Severinson said.

"We believe our customers see the same kind of transition to green mobility as we do,” he said.