Electrification and autonomous cars are the biggest buzzwords in the automotive industry today. Volvo Cars is wasting no time in meeting the challenges, and has laid out clear targets to reach by the middle of the next decade.

The Swedish carmaker expects to generate half of all sales annually from full electric cars, and one third of all cars sold to be autonomous driving cars. In addition, the Geely-owned company expects half of all cars it offers to customers to be from its subscription service, which has recently taken off under the ‘Care by Volvo’ brand. Volvo has stopped development of diesel engines, which is logical given that oil burners are now being shunned by Europe, its major market.

Volvo says that it expects these initiatives to transform its connection to its customer base, with the aim to build a total of more than five million “direct consumer relationships” (as opposed to traditional car buyers) by the middle of the next decade, creating new sources of recurring revenue. This will also offer the company far greater potential to develop connected and other services for customers.

“Our customers’ expectations are changing rapidly. This means that Volvo Cars is also changing rapidly. These initiatives will help transform Volvo from being purely a car company to being a direct consumer services provider,” said Hakan Samuelsson, president and CEO of Volvo Cars.

On the financial side, Volvo aims to generate premium-level profitability in line with other premium car makers, driven by increased sales and revenues across all three global sales regions, and a broader range of cars, including sales to the new segment of autonomous ride-hailing companies.

The company’s improved financial performance will also be driven increasingly in the future by industrial synergies generated with its affiliated partner companies. Volvo expects to benefit from lower procurement costs, shared development costs and economies of scale alongside Polestar, its premium performance EV brand, and Lynk & Co, Geely’s new global car brand in which Volvo owns a 30% stake.

“This paves the way for Volvo Cars to continue growing fast into the middle of the next decade. The company has been transformed since 2010 into a global premium car company. Now it is time for this transformation to be turned into a period of sustained profitability in line with other premium brands,” Samuelsson said.

Volvo Cars achieved record profits and sales in 2017, with a 27.7% increase in operating profit and global sales of 571,577 cars. The results marked the company’s fourth consecutive year of record growth, underlining the transformation of Volvo’s finances and operations since being acquired by Geely. It has also expanded its global manufacturing footprint and completely renewed its model portfolio in recent years.