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The company believes electrification is the only practical strategy to achieve the EU's tighter 2020 emissions mandate.

Volvo is the latest automaker to place a big bet on electrification for its core models, expecting gasoline and diesel engines to play a much smaller role in the not-too-distant future.

The company last year announced plans to develop at least two electric models, one based on the new Compact Modular Architecture and another using the larger Scalable Product Architecture. The first example will arrive on the market in 2019.

Speaking to Wards Auto, Volvo CEO Hakan Samuelsson suggests the company's electrification strategy has quickly matured from an exploratory interest to a keystone of its future product roadmap. He anticipates a tipping point after 2020 when decreasing battery costs are expected to make hybrids and EVs competitive with diesel powertrains, which will become more expensive as governments tighten emissions limits for CO2 and NOx.

"The driving experience with a fully electric vehicle is really very good with high acceleration (and) quiet, little or no transmission noise, so once we bring down the cost it becomes a very good proposition," the executive said. "People will buy it not just because of lower emissions, but because it's good technology."

Volvo is also confident that charging infrastructure will continue to expand naturally without requiring direct investment from automakers. At the other end of the spectrum, Samuelsson believes infrastructure costs will prevent hydrogen fuel cell powertrains from gaining traction.

"With hydrogen you would require all new infrastructure once more, so I think there is a limit to what people will invest in," he said. "We believe we have to focus on one main energy source and we believe that is electrification because it's more flexible ... Of course, we might be wrong."

Volvo intends to have over a million electrified vehicles on the road by 2025.