Volvo has no plans to challenge low-cost EVs in China as a price war intensifies

Volvo has no plans to challenge low-cost EVs in China as the ongoing price war intensifies. The EX30, Volvo’s cheapest EV, starts at around $28,000 (200,800 yuan), but that’s as low as the company will go.

Although Volvo was one of the first automakers to commit to an all-electric future, it recently backed off its pledge.

Volvo adjusted its 100% EV sales goal and now expects 90% to 100% of global sales to be electrified by 2030. That includes all-electric vehicles (EVs) and plug-in hybrids (PHEVs).

The up to 10% will be “a limited number of hybrids” if demand calls for it. By the end of next year, Volvo sees 50% to 60% of global sales being electrified.

Although Volvo still believes its future is electric, according to CEO Jim Rowan, markets are moving at different speeds. One of the biggest reasons behind Volvo’s strategy shift is China, the world’s largest EV market. The other is new tariffs on Chinese EVs in the EU and US, where the already popular EX30 is built.

“The China market has changed dramatically in the last two or three years,” Rowan told Automotive News Europe.

Volvo has no plans to rival low-cost EVs in China

According to Rowan, China’s new car market has “diminished” with a big second-hand market, something the country “never really had before.”

Volvo’s CEO said that although middle-class buyers usually chose a Western brand in the past, the rise of Chinese EV makers has been even more detrimental to these brands.

“I don’t compete at the low end of the BEV space in China,” Rowan explained it can be “a tough place to be.”

Volvo expects better results from premium EVs. Last November, the company introduced its first electric luxury van, the EM90, in China.

Volvo’s electric van is a “Scandinavian living room on wheels” with up to 458 miles (738 km) CLTC range. The EX90 starts at $115,000 (818,00 yuan) in China.

Although Volvo just launched its cheapest EV in May, the EX30, starting at around $28,000 (200,800 yuan), that’s as low as the company plans to go, according to Rowan.

Many EVs are selling for much less in China. For example, BYD’s cheapest EV, the Seagull, starts at under $10,000 (69,800 yuan). It was China’s best-selling EV last month, with nearly 41,000 models sold in August alone.

Volvo is fast-tracking EX30 production at its Ghent, Belgium plant to overcome the new tariffs in the US and EU. Volvo is expected to begin building EX30 models at the plant next year for export.

In the US, Volvo’s EX30 will start at $34,950. The smaller electric SUV was already the second best-selling EV in Europe last month, behind Tesla’s Model Y.