Volvo has no intention of competing with low-cost electric vehicles (EVs) in China as the market faces an escalating price war. The EX30, Volvo’s most affordable EV, is priced at around $28,000 (200,800 yuan), but according to the company, this is the lowest price point it will offer.
Despite being an early advocate for an all-electric future, Volvo has recently adjusted its sales strategy. The automaker now aims for 90% to 100% of its global sales to be electrified by 2030, encompassing both all-electric vehicles and plug-in hybrids (PHEVs). CEO Jim Rowan noted that this shift allows for a limited number of hybrids, contingent on market demand. By the end of next year, Volvo anticipates that 50% to 60% of its global sales will be electrified.
Rowan highlighted the dynamic nature of the Chinese market, stating that the landscape has changed significantly over the past few years. The emergence of a robust second-hand vehicle market has altered consumer behavior, affecting the sales of Western brands that previously thrived among middle-class buyers. The rise of local Chinese EV manufacturers has further intensified competition, making the low end of the battery electric vehicle (BEV) market particularly challenging.
“I don’t compete at the low end of the BEV space in China,” Rowan stated, emphasizing the tough conditions in that segment. Instead, Volvo is focusing on premium EV offerings. Last November, the company launched the EM90, its first electric luxury van in China, promoting it as a “Scandinavian living room on wheels” with a range of up to 458 miles (738 km) according to the China Light-Duty Vehicle Test Cycle (CLTC).
While the EX30, introduced in May, represents Volvo’s push into more affordable EVs, Rowan confirmed that it marks the company’s lower limit for pricing. In contrast, numerous Chinese EVs are available at significantly lower price points, with BYD’s Seagull starting under $10,000 (69,800 yuan) and achieving notable sales, including nearly 41,000 units in August alone.
To address new tariffs imposed on Chinese EVs in the EU and US, Volvo is accelerating EX30 production at its Ghent, Belgium plant, with plans to commence manufacturing there next year for export. In the US market, the EX30 is set to start at $34,950, while it has already emerged as the second best-selling EV in Europe last month, trailing only Tesla’s Model Y.
Source: Automotive News Europe
