This is similar to Subaru's decision 25 years ago to sell only AWD vehicles in North America.

Volvo will keep selling as engines until those models are replaced - this policy only affects new models, and given the near-luxury price range of Volvos, and the fact that there are CAFE gal mileage rules and emissions targets, and it costs money to develop both a gas and hybrid model of every model, as well as maintain inventory etc., so why not just drop the gas only models. Even cars like the Acura NSX are hybrids