Volvo Cars to make only electric vehicles by 2030

China-owned Volvo Cars said on Tuesday it plans to only sell fully electric cars as of 2030, seeking to cash in on the premium electric market, the fastest-growing segment in the global market.

All models with an internal combustion engine, including hybrids, would be phased out, the Swedish carmaker said.

"There is no long-term future for cars with an internal combustion engine," said Henrik Green, chief technology officer.

The 2030 target was "driven by strong demand for its electrified cars in recent years and a firm conviction that the market for combustion engine cars is a shrinking one."

"To remain successful, we need profitable growth. So instead of investing in a shrinking business, we choose to invest in the future - electric and online," chief executive Hakan Samuelsson said in a statement.

Last year, the carmaker launched the XC40 Recharge, its first fully electric car, and on Tuesday was set to launch its second fully electric model.

By 2025, Volvo Cars said it aims for 50 per cent of its global sales to consist of fully electric cars, with the rest hybrids.

Volvo Cars also planned to focus more on online sales, saying that all fully electric models will only be available online via Care by Volvo, until recently known as the name for Volvo Cars' subscription service.

The China-based Zhejiang Geely Holding Group took over ownership of the Swedish carmaker in 2010 from US automotive giant Ford.