Swedish auto major Volvo has stated that it will stop developing new diesel engines. The reason behind this move is the rise in the cost of reducing emissions of nitrogen oxide.
Volvo Chief Executive, Hakan Samuelsson revealed this information in an interview. Samuelsson said, "From today's perspective, we will not develop any more new- generation diesel engines."
Samuelsson stated that the Volvo would manufacture the current diesel engine models introduced in 2013. He also said that keeping the diesel engines compliant with higher anti-pollution standards will be too expensive.
The current generation of the diesel engine is expected to be manufactured until 2023. The Swedish carmaker will invest in the electric and hybrid models. The first electric car from Volvo is likely to hit the market by 2019.
Samuelsson added, "We have to recognise that Tesla has managed to offer such a car for which people are lining up. In this area, there should also be space for us, with high quality and attractive design."
Previously, Samuelsson stated that the tighter emission norms would shoot up the price of the diesel vehicles. The rise in price will reach a point where the plug-in hybrid vehicles will be an attractive alternative.
Europe is the main market for Volvo diesel cars. The diesel cars account for 50 percent of the new cars sold. The company retails 90 percent of its diesel XC 90 in Europe.