Volvo’s ambitious goal to transition to all-electric vehicles by 2030 has hit a roadblock in the United States, with its electric vehicle (EV) sales plunging by 69 percent through April 2024, compared to the same period last year. The automaker aims for EVs to constitute half of its global sales by 2025.
In the first four months of 2024, Volvo sold only 1,298 EVs in the U.S., a significant drop from the 4,138 units sold during the same period in 2023. Meanwhile, sales of Volvo’s plug-in hybrid models saw a 55 percent increase, totaling 10,124 units, contributing to an overall 15 percent rise in sales from 36,094 in Q1 2023 to 41,555 in Q1 2024.
According to data from Cox Automotive reported by Autonews, Volvo experienced the largest decline in EV sales among luxury brands in the U.S. last quarter. This decline can partly be attributed to Volvo’s limited EV product offerings in the American market.
Currently, Volvo’s U.S. lineup includes only two fully electric vehicles: the XC40 Recharge and the C40 Recharge. While these models have received critical acclaim, their starting prices of $52,450 and $53,600, respectively, before incentives, are significantly higher than the Tesla Model Y, which starts at $44,990.
Unlike Tesla, which has frequently adjusted its pricing to stay competitive, Volvo has maintained its pricing strategy, leading to frustration among U.S. dealers. Selling these expensive compact crossovers has become challenging, especially when price sensitivity is high among shoppers. However, Volvo’s pricing strategy has allowed it to maintain a 16 percent gross margin on each sale.
Globally, EVs accounted for 21 percent of Volvo’s sales in Q1, the highest proportion in the last two years. Despite this, sales of the XC40 and C40 Recharge experienced a decline globally. The upcoming launch of new models like the EX30 and the EX90 is expected to bolster Volvo’s EV lineup. The EX90, a larger model, may appeal more to American buyers, but its $76,695 price tag could remain a concern. The EX30, starting at $34,950, could be pivotal in attracting cost-conscious consumers in the U.S.
