Bentley Motors is once again pushing back a target to exclusively offer all-electric vehicles, with plans to continue leaning into plug-in hybrid electric vehicles until at least 2035.

The British maker of ultra-luxury performance cars on Thursday said it continues to have “an ambition to be building only fully electric cars from 2035,” but the adjustment is needed due to changing market conditions.

Bentley Chairman and CEO Frank-Steffen Walliser said “there’s not a lot of demand” for EVs from current customers. But he said the automaker needs to meet legislation and be ready for a new generation of customers.

“Legislation, for sure, is driving electrification … but also competition,” Walliser said during an online media event Thursday. “We have to be honest, there’s not a lot of demand.”

The Volkswagen-owned carmaker initially said in 2020 that it planned to exclusively offer all-electric vehicles by the end of this decade. Former CEO Adrian Hallmark days before leaving the company said those plans would be delayed by a few years but did not give a set timeframe.

Bentley said it plans to offer a new EV or plug-in hybrid electric vehicle each year until 2035, starting with its first EV, a “Luxury Urban SUV,” in 2026. The EV was initially expected to be produced starting next year.

“We want to produce PHEVs as long as markets and customers demand it,” Matthias Rabe, head of Bentley’s research and development, said during the Thursday briefing.

Rabe said Bentley may continue to release vehicles with traditional internal combustion engines in the years to come.

Walliser, who succeeded Hallmark in July, said the automaker’s first EV will be smaller than its traditional vehicles, including its current Bentayga SUV.

Hallmark previously said the delay in Bentley’s first all-electric vehicle was the result of software issues as well as difficulty with developing the vehicle’s architecture to Bentley’s standards. He had said those challenges were the primary driver behind delaying its EV plans, rather than the changing market conditions.

“Four years almost to the day that Bentley initially outlined its Beyond100 strategy, we adapt to today’s economic, market and legislative environment to initiate a major transformative phase for tomorrow,” Walliser said in a release.

Along with the changes, Bentley also is changing the name of its business strategy from Beyond100, a nod to the more than century-old carmaker, to “Beyond100+.”

Bentley is well known for lavish, large and powerful vehicles with 12- and 8-cylinder engines that can cost millions of dollars for special- or exclusive-edition models. However, the automaker ended production of its famed “W12” engine earlier this year, as it focuses on PHEVs with 8- and 6-cylinder engines.

PHEVs feature an internal combustion engine combined with a hybrid system and have a larger battery than traditional hybrid vehicles as well as a plug to recharge the vehicle’s battery. They typically allow drivers to travel a certain number of miles using the battery before the engine is needed to power the car or truck.

NASHVILLE, Tenn. — Volkswagen-backed Scout Motors revealed its first electric vehicles Thursday and announced plans for the brand to expand its lineup to include an emerging type of plug-in hybrid electric vehicle in addition to EV models.

Scout, a former American vehicle brand from 1961 to 1980, was expected to exclusively offer EVs in a bid for the German automaker to expand its presence in the U.S. However, slower-than-expected adoption of EVs and higher costs have led it to change course and include extended-range electric vehicles, or EREVs.

“Being a startup that moves quickly, we can pivot,” Scout CEO Scott Keogh, a longtime auto executive who previously led VW’s operations in the U.S., told CNBC. “The pivot that we made a number of months ago into offering range extender definitely was a smart play.”

EREVs are basically a type of plug-in hybrid electric vehicle. They include EV motors and battery cells, as well as a traditional internal combustion engine to power the vehicle’s electric components when the battery loses its energy. The engine essentially acts as a generator to power the EV components when needed.

Keogh said Scout added EREVs to better protect the brand from any market volatility amid less-than-expected consumer demand for EVs.

“We think electrification is the future. Range extender sets it up as an EV car, so it introduces people to electrification, yet it has a super smart, let’s say, ‘backup plan,'” he said during an interview Thursday. “It will drive like an EV.”

He said Scout has no plans to offer a traditional, non-electric vehicle with only an internal combustion engine.

The company’s first vehicles — a full-size pickup truck and large SUV — will cover about 40% of the highly profitable U.S. sales market.

Keogh said the company targets to be profitable on an operational basis within the first full calendar year after initial production of the vehicles, which will be built at a $2 billion plant that’s under construction in South Carolina.

“If you look at these profit pools, these two areas, from this size pickup truck to this sized SUV … these are the largest profit pools in the world,” Keogh said.

Being profitable during that timeframe would be quite a success, as current EV startups such as Rivian Automotive and Lucid Group lose tens of thousands of dollars on each vehicle they produce after several years.

Meanwhile, Keogh said an announced software deal between VW and Rivian will not impact Scout’s operations. He described the $5 billion software deal, which includes the establishment of a joint venture, as an “exciting opportunity” for Scout.

“It’s good for scaling. It’s good for technology. It’s good for everything,” Keogh said.

Scout’s South Carolina plant is planned to have a production capacity of 200,000 vehicles. Scout expects to use batteries — the most expensive part of an electric vehicle — from VW’s joint venture battery cell manufacturer in Canada.

The company opened reservations for the vehicles Thursday night on its website. Scout plans to sell the vehicles directly to consumers instead of through a traditional franchised dealer network like VW does in the U.S.