Volvo’s low-cost electric crossover EX30 has started fulfilling its promise of profitable growth. According to the press release, strong customer demand for the EX30 helped boost the company’s gross margins in the first quarter of the year.
Volvo EX30 starts delivering profitable growth
The entry-level Volvo EX30 is on track to advance as the brand’s top-selling electric vehicle model by the end of the year despite only launching just months ago.
The Swedish automaker’s global deliveries of EX30s reached 14,500 in Q1 2024. March alone accounted for over half of that total, with 8,681 EX30s deliveries.
Despite serving as Volvo’s cheapest EV, it still managed to yield 15%-20% gross margins. For comparison, the overall battery-electric vehicle (BEV) portfolio reported a 16% gross margin.
That rate already matches that of Tesla and Rivian’s 17.4% and 15% gross margins in the same period, respectively. Notably, these two American electric automakers sell larger and higher-cost EVs that used to record larger gross margins.
“Its first quarter performance demonstrates the prospects of the EX30. In only a few months, the EX30 has lived up to its promise of being a profitable growth driver for the company’s business while collecting numerous awards.”
Volvo
Volvo’s electrification progress
Volvo enjoyed record-breaking global vehicle sales in Q1 2024, primarily due to the surging demand for its BEV offerings.
Notably, it is among the first legacy automakers to commit to electric vehicles. In effect, it successfully hit a 100% electrified sales share in 18 different markets in Q1 2024. It represents notable progress from just 15 markets in the prior quarter.
Meanwhile, BEVs accounted for more than 40% of its sales share in 19 different markets in the first quarter. It also indicates a remarkable increase from just 13 markets in Q4 2023.
The low-cost EX30 largely contributed to the brand’s sales growth in Q1 2024, according to Volvo Cars CCO and Deputy CEO Björn Annwall. The electric crossover boosted the company’s EV share to a record 21% in the first quarter.
“In the first three months of 2024, thousands of customers across Europe got behind the wheel of an EX30, with many more in line as Volvo Cars prepares to deliver EX30 cars in other countries as well, including the US, China, South Korea and Canada, in the coming weeks and months. This means by the end of this year, EX30 will be sold in over 90 countries.”
Volvo
Moving forward
Volvo aims to have its BEVs, including the EX30, EX40, EC40, EX90, and EM90, account for 50% of its overall sales by the end of 2025.
According to Volvo CEO Jim Rowan, it further plans to launch a new BEV model as early as next year. However, the company has yet to reveal more details about this upcoming player in the highly competitive electric vehicle market.
“We have a cycle plan that takes into account different parts of the world, the different models, shapes, sizes and price points, customer demographics and the change in customer sentiment. We put all of that thinking into a range plan or cycle plan strategy. We develop cars and then when the time is right, we announce those cars to the public. So that is a ‘wait and see’ question.”
Volvo CEO Jim Rowan
Volvo aims to make the all-electric crossover EX30 available to more than 90 countries by the end of 2024. With an expanding electric vehicle portfolio, the Swedish automaker expects to witness strong customer demand this year.
It is also optimistic that revenues can hit SEK 550-600 billion ($50B to $55B) with an above 8% EBIT margin in 2026. For reference, its revenue dropped 2$ to SEK 93.9 billion ($8.6B) in Q1 2024, apparently due to contract manufacturing. Presented below are Volvo’s Q1 2024 global sales results:
