(Bloomberg) – As it turns out, news of the death of theinternal combustion engine may not be very exaggerated after all.On Wednesday, Volvo Car Group said it expects to soon start phasingout vehicles powered solely by fossil fuels, joining a parade ofmanufacturers in shifting toward electrics more quickly than mostin the industry expected a few years back.

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Related: Best eco-friendly cars for Earth Day2017

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Volvo says it plans to offer only hybrid or full-electric motorson every new model launched in 2019 or later, including fiveelectrics it expects in its lineup by 2021. Though the company willcontinue to produce full-combustion versions as it makes the smallupgrades automakers introduce with each new model year, when amajor revamp occurs (typically every seven years) it will no longeroffer that option. That means that by about 2025 Volvo will makeits last full-gasoline or diesel car — the first majormanufacturer to make such a pledge.

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“This announcement marks the end of the solely combustionengine-powered car,” said Volvo Chief Executive Officer HakanSamuelsson. “Volvo's brand will be strengthened byelectrification.”

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Related: The world's leading electric vehicle market? It'sNorway

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Though electric cars have been around since the 1800s and havegotten a lot of attention in the past half-decade or so, they'restill just a fraction of the overall market as drivers balk at highprices and limited driving ranges. Battery-powered autos made upabout 1% of sales in the U.S., Europe and China last year.

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Government push

And even those tepid sales figures are largely driven bygovernment prodding. China, in an aggressive push to fight smog,plans to impose quotas for battery-powered cars that willeffectively force manufacturers to sell electrics. In Europe, whereregulators have relied on diesel to reduce pollution, stricterrules that take effect in 2020 will cut limits on carbon dioxideemissions by a third — a threshold that's almost impossible tomeet without fully or partly electric engines.

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Related: Choosing a plug-in electric car

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In the U.S., though President Donald Trump has promised to scraprules that would require automakers to almost double gas mileage,California is leading a push for even stricter standards. Itsregulations will require about 15% of cars and trucks sold in 2025to be zero-emission — meaning they'll almost certainly run onelectricity. At least nine other states have embraced California'slead.

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Consumer resistance is starting to ease as tighter regulationforces carmakers to lower costs, improve batteries, and come upwith better designs. Goldman Sachs Group Inc. estimates about aquarter of cars sold globally by 2025 will be hybrid orelectric.

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Of course, Tesla Inc. aims to have a big piece of that. TheCalifornia company started making its latest model this week— at about $35,000 its most affordable ride yet — as partof a plan to produce 500,000 cars in 2018 and 1 million annually by2020.

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Tesla is scaring traditional automakers into action. BMW saysthe electric iNext will replace the 7-Series as its flagship in2021 and expects battery-powered cars to account for some 25% ofits sales by 2025. Volkswagen, in an effort to overcome revelationsthat it cheated on emissions tests for millions of diesels, isaccelerating its rollout of electrics. The Audi luxury brand willintroduce its first all-electric model, an SUV, in 2018, followedby another two battery-powered vehicles by 2020. In 2019, VW'sPorsche unit will introduce the all-electric Mission E. Then in2020 the VW car brand will roll out the first of four electric carsit's planning.

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Related: Ford plans long-range electric car to compete withTesla, GM

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An e-Golf electric car during the official production startin the German car manufacturer Volkswagen Transparent Factory inDresden, eastern Germany, earlier this year. (AP Photo/JensMeyer)

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Cut Prices

Automakers understand that they must cut prices and improvedriving range for consumers to really embrace the technology, andthey're starting to deliver. GM late last year introduced theall-electric Chevrolet Bolt, with a range of 238 miles and a pricetag of $38,000. And Volvo CEO Samuelsson said vehicles must have arange of at least 350 kilometers before they'll gain broadacceptance, a target he says his cars will meet.

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A big hurdle will be the cost of developing electric technology.Daimler AG has budgeted 10 billion euros to develop 10 new electricmodels by 2022. BMW's profit margins are at their lowest since 2010due to increased spending on electrics.

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Related: VW said to reach U.S. deal to fix most tainted Audidiesels

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The shift to greener cars will squeeze profits across theindustry for years to come as manufacturers develop both electricand traditional combustion engines before battery-powered vehiclesbecome economically viable. That turning point to profitability islikely to come around 2020, according to VW brand chief HerbertDiess.

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“For us and for many of our competitors,” Diess says, “this timewill be an enormous challenge.

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Volvo, owned by Chinese billionaire Li Shufu, understands thosecost considerations but Samuelsson says he has the financing tomake the shift. While the uncertain forecast for prices ofbatteries makes it difficult to predict the cost of the endeavor,he says he's confident the move will benefit the brand.

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Loyal Following

“We'll get more attractive cars,” Samuelsson said. “Thisimproves our competitive situation. It also goes back to Volvo'sbrand values of protecting what's important.”

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Like its recently deceased Swedish cousin Saab, Volvo has builta loyal following with its boxy, no-nonsense design, a reputationfor reliability, and cutting-edge safety features (Volvo inventedthe three-point seat belt in the 1950s.) Volvo has enjoyed arevival in recent years with a focus on SUVs like the XC60— since 2009, its bestselling model.

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Volvo in April said its first electric vehicle will be aChinese-made compact expected to hit the market in 2019. The model,to be sold globally, will be based on the basic design of thecompany's XC40 compact SUV.

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“We want to be a leading brand in terms of responsibility,safety and sustainability,” Samuelsson said. “So we think thissuits us perfectly.”

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