The 2021 XC40 Recharge P8 starts at $54,985, including shipping. Tax incentives for EV buyers would lower the price by at least $7,500. While the Tesla Model Y starts at $51,190, including destination, it does not qualify for the credit.
Beating the Model Y on price before other European luxury competitors would be key to Volvo’s potential success in that segment, said Sam Fiorani, vice president of AutoForecast Solutions.
“The XC40 is an outstanding small crossover in its own right, and adding the power and driveability of an electric drivetrain at a modest price should find a market,” Fiorani said.
But in another crucial metric, Volvo gets lapped. The XC40 EV’s range of 208 miles trails the competition. The Model Y leads the pack with 326 miles, followed by the Jaguar I-Pace at 234 miles and the Audi E-tron Sportback at 222 miles.
If Volvo executives have range anxiety, Gustafsson isn’t showing it. “Based on how our customers can charge the car, I think [range] is not going to be a concern,” he said.
Volvo is betting the new model will help sustain a robust recovery from the coronavirus shutdowns this year.
The brand’s U.S. sales have picked up faster than those of its European competitors and the overall industry. In the first nine months, Volvo sales are down 5 percent year over year compared with BMW’s 24 percent slump, Audi’s 22 percent slide and Mercedes-Benz’s 12 percent decline. In the latest quarter, Volvo outsold Ford Motor Co.’s luxury Lincoln brand by nearly 2,800 vehicles. Ford owned Volvo from 1999 to 2010.
Volvo’s sales rebounded from the COVID-19 slump in June and has seen year-over-year gains in every month since.
“We decided early to be very aggressive in the southern part of the country,” Gustafsson said. “So the first two or three months, the region was really the locomotive of the company.”
Volvo quickly implemented new operating procedures to help its dealers sell vehicles safely, including digital retailing, no-contact vehicle pickup and delivery, wearing masks and facility cleaning.
In March, the automaker introduced Volvo Valet, a mobile app that allows consumers to schedule pickup and delivery of vehicles for service or maintenance. The services are offered by 208 of Volvo’s 282 U.S. dealers.
Volvo also acted early to secure supply — nearly 90 percent of Volvos sold in the U.S. are built in Europe. The automaker prioritized production for the American market before the annual European summer shutdown.
“We were convinced that the U.S. was going to see a V-shaped recovery in terms of vehicle demand,” Gustafsson said.
Gustafsson is optimistic the retail momentum will continue.
“We are seeing good interest on our website, we see positive developments on floor traffic,” he said. “The vessels are full of cars — and exactly the cars that the dealers are asking for.”