Volvo Aims to Overcome Challenges in Its Electric Vehicle Journey

Volvo once aimed to completely exit the gas car market, but now it’s focused on solidifying its presence in the EV landscape. The journey has been anything but smooth for the Swedish automaker. While the compact EX40 has consistently performed well, other models have faced significant challenges. The EX90 was meant to be a bold leap into the future, but ongoing software issues have led to costly hardware replacements. The smaller EX30 struggled as well, with tariffs disrupting the launch of Volvo’s first affordable mass-market EV, ultimately resulting in its withdrawal from the US market.

Now, with the introduction of the EX60 compact SUV, Volvo is looking to regain its footing in the EV sector. Executives gathered in New York City to celebrate the US launch of this new model and the opening of orders for deliveries set for later this summer. Priced starting at $59,795, the EX60 will be pricier than the gas-powered XC60 crossover, which has recently become Volvo’s best-selling model ever. However, it will be cheaper than the plug-in hybrid XC60, highlighting the current popularity of hybrids.

The EX60 is entering a challenging market for EVs, especially with the removal of the $7,500 federal EV tax credit, policy shifts, and tariffs driving up costs across the board. While global EV sales are on the rise, the American market is experiencing a noticeable downturn. Nevertheless, Volvo believes the EX60’s standout features—400 miles of range, rapid charging from 10 to 80 percent in just 18 minutes, and regular over-the-air software updates—will help it navigate these obstacles.

Volvo CEO Håkan Samuelsson expressed confidence in the timing of the EX60’s launch, stating, “We think this car will not be electrified with subsidies or incentives. It will be electrified… because we can offer something better to consumers.”

However, Volvo’s plans to phase out gas vehicles are still evolving. Slowing demand for EVs and concerns about charging infrastructure have prompted some manufacturers to rethink their timelines for moving away from combustion engines. While Volvo previously aimed to stop selling internal combustion vehicles by 2030, it has now opted for a more flexible approach. The company will also expand its offerings to include plug-in hybrids and extended-range EVs, reflecting a broader industry trend.

The EX60 marks a fresh start for Volvo. The company has intentionally stripped away legacy combustion-engine assumptions from its engineering process, as noted by CTO Anders Bell. This shift has allowed Volvo to develop a more modern, software-defined architecture for its vehicles. Bell emphasized that the lessons learned from past challenges have been integrated into the EX60’s design and software.

Regular software updates will be a key feature for the EX60, with major updates planned every three months. Bell noted that sharing a common digital architecture across multiple vehicles enhances overall quality. Early testing has shown that the EX60 feels significantly more stable than previous Volvo EVs at the same development stage.

Upon its release, the EX60 will compete with the Tesla Model Y, one of the most sought-after vehicles globally, as well as emerging contenders like the Rivian R2 and BMW iX3. Samuelsson clarified that the EX60 is not designed to be a “global” vehicle, as it will primarily target the US and European markets. He pointed out that the automotive industry is increasingly dividing into two distinct markets: one focused on China and the other on Europe and North America. While Volvo has access to Chinese technology through its parent company Geely, its focus will remain on Western consumers.

Samuelsson also highlighted the company’s upcoming hybrid models, which will flip the traditional hybrid formula by making them behave more like EVs while retaining a combustion engine for longer trips. These extended-range EVs could attract American consumers who are not yet ready to fully embrace battery-electric vehicles.

Volvo’s integration of Android Automotive as its core vehicle operating system will provide an edge over competitors in terms of AI feature integration. At a recent tech conference, Volvo announced that the EX60 would allow the AI chatbot Gemini to access the vehicle’s external cameras, assisting drivers with lane markings and road signs. Additionally, Volvo plans to roll out Gemini to around 2.5 million vehicles from the 2020 model year onward through over-the-air updates.

Despite the challenges, Volvo’s executives acknowledged the complexities of their EV launches, with Bell admitting it has been a “bumpy” journey. The EX90 continues to receive updates aimed at resolving its issues, with the latest addressing over 20 separate concerns while enhancing the driving experience. Alongside the EX60, Volvo is also developing a new EV to replace the discontinued EX30. Overall, the company is eager to convey that it has learned from its experiences and is prepared to take on the competition.

“The EX60 will be much more solid,” said Erik Severinson, Volvo’s chief commercial officer. “With the number of vehicles we’re going to sell, the EX60 will be significantly larger. More experience, more vehicles, more consumers.”