Volvo shocks with Aussie electric target

Car giant Volvo has shocked the motoring industry, announcing plans to stop selling petrol vehicles in Australia by 2026, with a top executive calling the older technology a "shrinking business".

Volvo's Australian deadline will come four years before its worldwide target to transition to electric vehicles, and comes one week after it launched its first electric car in Australia.

Experts said the move showed Australia still had the potential to be "a world leader in the transition to electric vehicles" despite low take-up to date.

Volvo Car Australia managing director Stephen Connor made the surprise announcement on Thursday, revealing the car maker would switch to all electric vehicles by 2026 to give it a "strategic advantage" in the Australian market.

"There is no long-term future for cars with an internal combustion engine. So instead of investing in a shrinking business we choose to invest in the future, which is fully electric," he said.

"Globally, Volvo is firmly committed to becoming an electric-only car maker by 2030 but in Australia we will make the transition happen by 2026.

"The earlier deadline will allow us to meet the expectations of our Australian customers and be a part of the solution when it comes to fighting climate change."

Mr Connor said the car marker expected electric vehicles to make up 80 per cent of its Australian car sales by 2025, making "converting the last 20 per cent of our customers" its challenge.

"I am very confident we can achieve this and even go beyond to achieve our aspiration of selling 20,000 fully electric cars every year in Australia," he said.

Volvo is the fifth-biggest selling premium car brand in Australia, with Federal Chamber of Automotive Industries figures showing the company's sales rose 63 per cent in September.

Volvo launched its first dedicated electric vehicle in Australia last week, the C40 Recharge, but has previously announced plans to launch four new electric cars and SUVs in Australia by 2024.

Electric Vehicle Council chief executive Behyad Jafari said Volvo's "remarkable" commitment showed car makers were starting to see potential for electric vehicle growth in the country.

"Australia has been slow out of the blocks but this announcement from Volvo shows we still have the potential to be a world leader in the transition to electric vehicles," he said.

"It shows they appreciate the momentum for EVs building in the Australian market and they see the opportunities in meeting the demand."

Mr Jafari said potential electric car buyers in Australia continued to struggle with a lack of supply and choice but Volvo's announcement could help "plug part of this gap".

Electric car sales make up 3.39 per cent of new car sales in Australia, according to the Council's State of Electric Vehicles report, though that represented a 65 per cent increase on last year.

The federal government also received more than 1500 submissions to its National Electric Vehicle Strategy consultation paper, which closed on Monday.