Volvo Promises The EX30 Is Designed To Make Volvo A Ton Of Money | The Morning Shift

The all-electric Volvo EX30 will start just a hair under $35,000 sans shipping when it goes on sale before the end of this year. That’ll make it the cheapest Volvo available to buy in the U.S., unless Volvo quietly shoves out an EX20 or something, which is unlikely. The thing is, Volvo is an ostensibly “premium,” some might even say “luxury” brand, so it might seem like the company is signing itself up for slim margins with a volume-minded compact electric SUV that’s about as inexpensive as most similarly-sized internal-combustion models.

A Small and Overpriced (for Volvo’s Target Audience) EV is Coming

Not so, Volvo’s top brass promises. This thing is designed to print money. Courtesy Automotive News:

Volvo is expecting a 15 to 20 percent gross profit margin on the upcoming EX30 electric crossover, executives said during an investor presentation last week.

It will be the most affordable model in the Swedish automaker’s lineup.

“It’s the overall product balancing that we’ve done — cost reductions, shared platform and sourcing that gets us there,” Akhil Krishnan, head of Volvo’s small car programs, told Automotive News.

The China-made EX30 arrives in the U.S. next summer and starts at $36,145, including shipping. It rides on the Sustainable Experience Architecture platform, which underpins vehicles from other Geely group brands.

Volvo expects the EX30 to help lift the brand’s operating profit margin to 8 to 10 percent by mid-decade from about 6 percent currently.

“We’ll make better margins on this car than we do on … the XC40 BEV and the C40,” Volvo’s Chief Commercial Officer Björn Annwall said at the EX30 launch event in Milan last week. “We’re not doing this just for fun.”

Now, I too was at the launch event in Milan last week, and I asked a Volvo representative how the company is able to sell the EX30 for so little to start, given that 1) it’s importing the thing from China to start, which instantly stamps the EX30 with a 27.5-percent tariff and 2) the car also won’t qualify for Inflation Reduction Act-related tax credits for that reason.

The explanation given to me was that Volvo has the muscle of parent company Geely on its side along with all of the economies of scale that allows; that the EX30’s platform already existed, which significantly reduces costs; and that lots of clever, waste-saving design and engineering went into maximizing those margins as much as possible.

Plus, it’s not like Volvo isn’t giving itself plenty of opportunity to stretch those margins even further with a dual-motor variant and the Cross Country package seen above that’s due later, designed to cash in on the overlanding frenzy on this side of the Atlantic. The Swedish manufacturer has set itself up for success if it can deliver an EV that makes money from day one, something many true volume brands still haven’t quite figured out how to do. The only question remaining is whether shoppers will take to it.