Volvo ends its diesel era with the XC90

Volvo Car became the first vehicle manufacturer to commit to gradually phasing out fossil fuel-based vehicles in 2017. Since that year, the company began delving further into creating hybrid and fully electric models.

Diesel engines played a significant role for Volvo over the years, significantly boosting sales figures at one time. In Europe, diesel vehicle sales peaked nine years ago, but last year they fell to 14%.

The XC90 was pivotal for the brand’s resurgence since 2014, being the first vehicle manufactured with new engines developed under the direction of Li Shufu of Geely. The last manufactured XC90 will be exhibited in a Volvo museum in Gothenburg next month.

What this step means for other manufacturers

Diesel, initially marketed as a cleaner alternative to gasoline, experienced significant success in the early years of the century, but its demand declined after Volkswagen AG admitted in 2015 to using software to manipulate emissions tests.

European electric vehicle manufacturers face challenges in their market share due to decreasing subsidies and competition from Tesla Inc. and Chinese brands. Volvo Car has cut costs and stopped funding Polestar, an unprofitable electric vehicle manufacturer owned by Geely.

Although Volvo Car will continue to support its diesel customers and supply spare parts, its commitment to electric vehicles will not waver, as it perceives greater long-term growth in this technology. This decision represents a significant step toward phasing out fossil fuels. Although other manufacturers are also beginning to gradually move away from fuel vehicle production, it remains to be seen what the next steps will be toward a complete transition to zero-emission vehicles.