Volvo scoops European BEV podium place

The premium B-segment EX30 e-SUV made by Sino-Swedish OEM Volvo Cars sold 8,000 units in Europe in March, making it the continent’s third highest-selling all-electric model after the Tesla Model Y and 3, the firm says.   

“The EX30 was the third highest-selling EV in March, having only started its retail journey,” says Volvo CEO Jim Rowan. “The EX30 is the smallest fully electric premium SUV, but with big potential.

“The Q1 performance showed the early prospects of this car, even though deliveries are still in the ramp-up phase. The car is a profitable growth driver for us as a business, with deliveries in Q1 already reaching 14,500 cars and gross margins as planned between 15pc and 20pc,” Rowan continues. “We saw immediately sales of the car propelled to be the third bestselling EV in Europe, behind the Tesla Y and the Tesla 3. That is a great start.”

The firm’s chief commercial officer, Bjorn Annwall, echoes these sentiments. “It hit, I would say, an inflection point in Europe, where we started really to ship to customers in March,” he says. And this gives Volvo optimism for the model’s future global sales growth.

“In Asia Pacific and Latin America, that inflection point where we really ramp up deliveries will happen before summer, in May-June. In the US and Canada it will happen after summer, in September-October. And, in China, after launching it in Beijing Auto Show this week, it will start to ship during the summer,” Annwall predicts.

The EX30 is set to be on sale in 90+ countries by the end of the year. But its appeal is not expected to be uniform across the world.

Volvo forecasts it will perform well in Europe, because, in Anwall’s view, “it is a car that really fits the Europe perspective”. It is also expected to sell well in Latin America and in Asia-Pacific but to make much less of an impression in the US, where appetite for subcompact vehicles is lower.

In China, it will carefully marketed as purely a premium product — with a resultant limited number of profitable sales — rather than chasing volume at the expense of margin.   

Changing mix

Increasing EX30 sales put Volvo “well on track” towards guidance of at least 15pc volume growth in 2024 as a whole, according to CFO Johan Ekdahl. And it is also improving the firm’s BEV margins, which rose to 16pc in Q1’23, compared to 7pc in Q1’23, 9pc for 2023 as a whole and 13pc in the previous quarter.

While EX30 was the major contributor, Volvo also saw “improvements in the previous cars — EC40, EX40 — coming in, driven by lower lithium prices still flowing through somewhat into '24”, Ekdahl says.

But it is not all good news. While BEV margins were up, Volvo still enjoys higher margins from its ICE and hybrid models, which achieve 25pc profitability — meaning BEVs remain “slightly dilutive compared to company margins”. The lower selling price of the smaller car also has an impact.

“On revenue, we see a positive impact, of course, from the volume growth,” says Ekdahl. “On the sales mix and pricing side, we see a little bit of a change in mix — higher BEV share, ramp up of EX30, a lower-priced smaller car — having an effect on revenue.”

More to come

The EX30 is not the only new offering set to alter Volvo’s course this year. The firm has started production and customer deliveries of its all- electric EM90 MPV in China. And the D-segment/midsize EX90 e-SUV will start production in Charleston, SC in the first half of this year, with first deliveries shipping in the second half.

Volvo is not being as specific about potential margins for these vehicles as it has been about EX30’s 15-20pc, but the mood music is that they could be higher.

Ekdahl says that the EX30’s profitability as a smaller BEV is “an important proof point”, while Rowan points out that “smaller cars are always harder to get a better gross margin than the bigger cars, historically at least”. This suggests the new larger BEVs could boast improved economics.

Nor is Volvo finished with refreshing its all-electric line-up. The firm “will announce more EV cars at the back end of this year, which will start production and sales in 2025 as well”, Rowan says.

The EX90, according to the Volvo chief, is “set to introduce a paradigm shift in our technology”. The vehicle’s launch has been delayed while Volvo irons out some software issues, but Annwall argues that this work will have long-term benefits for its successors.

“When we delayed the EX90, part of the delay was to make sure that the follow-on products and software could be reused to a very high level. And that is exactly what is going to happen.

“We are at the peak of that investment, and then we harvest those investments that we have made over the course of the next five-to-seven years and over the course of the next products. What we will see is a reuse of really robust code that we will have written and tested in the EX90. Then we will see that being able to be ported into new products, which means the development work is much less costly and much more robust,” Annwall continues.

This will also mean that Volvo “can make sure that the distance between launching those cars and actually getting those cars into the hands of customers is much more in line with what we would like to see — a couple of months versus a year or more”, he maintains.