STOCKHOLM — A key to helping Volvo Cars’ EVs achieve price parity with comparable combustion-powered models will be an affordable small SUV the automaker plans to reveal in 2023.
Volvo showed a teaser image of the vehicle at the end of its introduction of the new EX90 flagship electric large SUV here Wednesday.
The EV will be a “city car aimed at a younger demographic who can subscribe to it and make it their first Volvo,” CEO Jim Rowan told Automotive News Europe.
“If we can get them in as first-time Volvo owners then we can try to maintain them as customers” as they marry and start families and require bigger vehicles, such as the EX90, Rowan said. But the flagship SUV is not an option for first-time car owners with starting prices in the 100,000-euro range.
In Europe, Volvo sibling brand Lynk & CO sells its 01 plug-in hybrid, which is a derivative of the Volvo XC40, via a subscription plan that costs 550 euros a month in Germany.
Volvo’s next EV is also poised to be a key contributor to the automaker reaching a goal of selling 600,000 battery-powered vehicles by 2025, up from about 40,500 through 10 months of this year.
Volvo has had recent success moving into lower segments. The XC40 became its No. 2-seller globally in 2019, two years after its debut, providing the brand with the boost it needed to reach its highest global sales total ever that year at 705,452. Today, the XC40 accounts for 26 percent of the brand’s worldwide volume.
Volvo previously announced plans for the small SUV, which will slot in below its XC40 compact SUV and C40 compact crossover, that it said would share the Sustainable Experience Architecture (SEA) that the Swedish automaker helped parent Zhejiang Geely Holding develop.
Smart’s #1, the first car from the brand’s new status as an electric-only joint venture between Geely and Mercedes-Benz, is on track to join Europe’s nascent small premium crossover segment in early 2023. The only other model in the niche is the DS 3 E-Tense.
The #1 marks the first appearance of Geely’s SEA electric vehicle architecture in Europe. The scalable platform can be adapted for nearly every segment size. Eventually, it will underpin vehicles from six or seven Geely brands, the automaker says.
The #1 is built in Smart’s factory in Xi’an, China, and will be exported to Europe.
Along with the money it will save by sharing a platform, Volvo has indicated that it is looking at less expensive battery chemistries than the lithium ion used in the EX90, naming lithium iron phosphate (LFP) as a candidate.
Rowan said other factors that should help bring down EV costs are improved energy density, faster charging speeds “and the addition of LFP on certain cars.” He declined to say whether that would include the small SUV.
Volvo cell provider CATL has already had success making LFP packs more affordable.
A recent teardown of the Chinese company’s LFP pack used in Shanghai-built versions of the Tesla Model 3 overseen by analysts from UBS bank revealed that CATL’s solution was the global leader in affordability at $131 per kilowatt hour.
Volvo said during its Capital Markets Day presentations in Stockholm on Thursday that it aims to have its battery pack costs down to less than $100 per kWh by 2025-26.
“We need to get price parity between BEV (battery-electric vehicle) and ICE (internal combustion engines) as quickly as possible,” Rowan said. “We think we’ll get there by mid-decade, around 2025.”
The small SUV, which was originally dubbed the XC20, is now widely expected to be called the EX30. This is in keeping with a nomenclature change that coincided with the EX90’s arrival, with the E being for electric and the X for crossover.
While Rowan stopped short of committing to using EX in the future, he said the new name did very well when Volvo tested it with customers. He said the combination of letters was immediately understandable to them.
“It’s pretty simple,” he said, adding that it helps that Volvo has spent decades getting people acquainted with XC for cross country. “They get that it’s an electric cross country.”
He said that one of the things he liked about Volvo when he joined the company was the simplicity of the nomenclature, because “a lot of companies can get that a bit mixed up.”
The small SUV will join Volvo’s first EV, the battery-powered version of the XC40, the C40 compact crossover and the EX90. Volvo plans to continue its annual debut of a new EV for the next four to five years, Rowan said.