Speaking after the Swedish carmaker posted a lower fourth-quarter profit, chief executive Jim Rowan said there was no need to cut prices because demand for Volvo’s cars remain high and the company has a solid order backlog for its full EVs.

Volvo’s EV unit sales tripled in the fourth quarter, and fully electric vehicles accounted for 18% of sales in that period compared to 6% the year before, its results statement showed.

“We don’t see (price cuts) at this point in time,” Rowan told Reuters.

“Demand for our (battery electric vehicles) is the highest that we’ve ever seen, the backlog for that as well.”

“We don’t have any intention to reduce pricing.”

Last month Tesla slashed prices globally on its EVs by as much as 20%.

Those price cuts are expected to hit EV start-ups like US firm Rivian more than established brands.

Companies focused exclusively on EVs – including Polestar, which is owned by Volvo Cars and its majority owner Chinese automotive group Geely Holding – were also seen as more affected than those with a mixed range.

Ford Motor has already followed Tesla’s lead, cutting the price on its SUV Mustang Mach-E by up to US$5,900.

German automaker BMW however has raised the retail price for some models it sells in China because of higher raw material and logistics costs.

Henrik Fisker, CEO of US EV maker Fisker, told Reuters he also has no plans to lower prices, arguing that the EV start-up’s cars were already competitively priced.

“I think we already priced our cars well,” Fisker said, adding that the carmaker hadn’t changed the price of its cars since 2020, while rivals had raised prices several times.

The Financial Times reported today that other carmakers such as Volkswagen, Hyundai, Kia and General Motors would also not slash prices.

Aside from carmakers, suppliers are worried they may be forced to cut prices to keep up with Tesla.

Despite the price cuts, some suppliers say they have seen no EV production surge so far.