Volvo Cars plans to introduce an affordable, high-volume electric vehicle for Europe in 2027, alongside two models developed specifically for China. However, the upcoming product launches come as the Swedish automaker faces mounting financial pressure, prompting a new cost-cutting programme that includes around 2,500 job reductions worldwide.
The new European model is expected to be unveiled in 2027, with customer deliveries scheduled to begin after the summer. It will form part of Volvo’s largest product offensive to date, which aims to introduce 13 new vehicles by the end of 2030. Three model unveilings are planned for 2027, including the European volume EV and two China-focused vehicles.
EX50 could succeed the EX40
Media reports have identified the upcoming European model as the EX50, potentially positioning it as a successor to the EX40. The current EX40 is based on Volvo’s older Compact Modular Architecture (CMA) platform and uses a 400-volt electrical system.
The new model is expected to use Volvo’s SPA3 platform, which debuted with the EX60 in early 2026. Its 800-volt architecture is designed to support faster charging and longer driving ranges. The electric vehicle plant near Košice, Slovakia, is expected to become a production site for SPA3-based volume models, with annual capacity of up to 250,000 vehicles.
SPA3 also incorporates a Cell-to-Body design, integrating the battery into the vehicle’s load-bearing structure. Volvo assembles its own battery packs using prismatic nickel-manganese-cobalt (NMC) cells sourced from multiple suppliers to reduce supply-chain risks. According to the company, differences in cell suppliers do not affect energy density or product characteristics.
The integrated design means individual cells cannot be replaced independently because they are bonded into the vehicle structure. Volvo addresses this limitation with a ten-year battery warranty.
EX60 demand remains strong despite production delays
Volvo has acknowledged that the Cell-to-Body architecture is slowing the EX60’s production ramp-up. Nevertheless, the model has already attracted more than 50,000 orders in Europe.
The EX60 is expected to play an important role in improving future profit margins. It also supports Volvo’s transition toward electrification: battery-electric vehicles accounted for 45% of the company’s total European sales in the third quarter of 2026.
Volvo targets SEK 5 billion in additional savings
Despite demand for its new electric models, Volvo Cars reported significant financial difficulties in the third quarter of 2026. The company attributed the pressure to intense competition, tariffs, the removal of purchase incentives and special effects linked to CAFE emissions credits in the United States. Sales in China fell by nearly 50%, contributing to an operating loss of SEK 3.7 billion, equivalent to approximately €332.2 million, and an EBIT margin of -5.6%.
In response, management is introducing an additional cost-reduction programme worth SEK 5 billion, or approximately €449 million. The measures will focus on indirect and variable costs.
Around 2,500 positions are expected to be eliminated globally, including approximately 2,000 in Sweden. Reductions will be implemented through the expiry of consultant contracts, natural employee attrition and severance arrangements.
Volvo is also lowering its investment spending by approximately 30% compared with 2024 levels to reduce its break-even point and protect cash flow. The company plans to consolidate manufacturing across five core plants worldwide, while exploring multi-brand production arrangements with parent company Geely at facilities in Chengdu, China, and Ghent, Belgium.
Further measures include adapting products more closely to regional requirements in the United States and China. Together, these changes are intended to reduce costs as Volvo prepares to expand its electric vehicle lineup over the coming years.