With this week’s unveiling of the compact Volvo EX30, following the debut of the big EX90 last winter, the Swedish automaker effectively bookends its line-up of battery-electric vehicles. It’s now well on its way to shifting to an all-EV line-up by the end of the decade.
“This is a big deal,” proclaimed Jim Rowan, who took over as Volvo CEO in March 2022. He’s confident Volvo has a significant opportunity to grow, based on the initial response to the EX30 and EX90 models which go into production in 2024, as well as the EVs Volvo is already selling, such as the C40 Recharge.
TheDetroitBureau.com joined a roundtable discussion with the Scottish-born Rowan to discuss the new EX30, as well as the challenges and opportunities presented by going all-electric.
Q: The EX30 is not only your smallest, but also least expensive all-electric model, at a starting price of $34,950 (before delivery fees). Who are you targeting with it?
Rowan: It’s a great addition to the portfolio for a couple reasons. For one, it’s going to allow us to talk toi a different demographic to bring younger people into the brand. Our (current) age demographic is older than we’d like it to be. Everything about the car has been designed not only to talk to the current, loyal Volvo customer (but also) Gen-Z. They are going to be the biggest single purchasing power in the history of this planet. If you don’t talk to them in a meaningful way then you’re going to suffer.
Q: So, you’re not targeting the traditional Volvo customer?
Rowan: What is really interesting is the loyal customer who may have traded up through the (years) … they’re getting older, they want to downsize as they get older. They still like a high SUV ride height but they want a smaller car. Our research tells us we can pick up a ton of olrder people who want a modern connected car with a smaller footprint. So, I think we’re going to find a lot of new customers as well as retaining a lot of our older customers.
Q: You’ll be offering a Cross Country version of the EX30. It’s the first time you’ve had a Cross Country model in a while. And it’s first time it’s been applied to an SUV and to an EV. Are you testing the idea to see if you can expand the (off-road-oriented) Cross Country concept further?
Rowan: I really like the idea of having Cross Country as part of the brand (to appeal to) customers who want to be a bit more outdoorsy, which we’re seeing post-COVID. People want to get out into the countryside. They want to enjoy their cars in slightly different ways. And here’s the biggest thing: when you have a fully electric car and you go camping for the weekend, you can run a small fridge for the weekend, or charge up an electric bike. You can do a bunch of things you could never do (before) because you have a massive electric power source. You know the old tagline, “Volvo for Life.” We’re bringing that back.
New product coming
Q: What are you going to do with the rest of the existing line-up? Will it all be going electric, even the current hybrid models?
Rowan: Yeah, of course. We need to look at the range. We’ve talked about going to an all-electric range. You can figure that out. Some of it will be easy. And with some we’ll have to make choices. Can we do a proper electric wagon? I get so many e-mails (asking for an electric wagon), mainly from Northern European people, and people in Maine. But we have to look at that and see if it makes sense for our portfolio. The question is not whether we can do that (wagon). Of course we can. The question is whether we should do it. I’m not going to give you an answer on that right now. Another question is whether we should go bigger than the EX90 or smaller than the EX30? All of those questions have come into play.
Q: Do you plan to target young buyers with other products?
Rowan: It’s not just about young buyers. It’s about attracting people from different brands. I think there are different brands we can take customers from because we have nicer cars or more electrified cars. And they see our company is more aligned to their lifestyle choices. And remember, we’re not a volume car company. We’re 1% of the total (global) car market. And if we get to 2% we’ll be massively successful. Massively successful.
Q: Small cars tend to mean thinner margins and lower profitability. How do you balance between being a sustainable company and a profitable one with products like the EX30?
Rowan: I think some Ferraris (are) pretty small and my guess is their profits are pretty good. This is a thing of the past. Just because (your cars) are small doesn’t mean you can’t make as much money if you add enough value for the customer … especially if you’re a premium company and they care about safety and sustainability. Then, I think you can balance that equation.
Hitting the target
Q: You’re targeting going all-electric by 2030. Is that really going to happen?
Rowan: I get asked that all the time. We’ve got places like Sweden and the Netherlands (where EVs account) for 40% now. We have two EVs at this point and we’re going to have five, six, seven. Ask yourself the question: By 2029, are you going to spend $50,000 on old ICE (internal combustion engine) technology that you don’t know how long you’ll be able to drive. I’m sure by 2029 buying an ICE engine is going to be a bad investment. You already see that with diesels.
Q: So, how fast will you be making the switch to electric?
Rowan: All we have to say is that we’re going to do a brand new electric car every year for the next five years.
Q: It was mentioned during the EX30 debut that you’re going to use over-the-air updates to add expanded features. There weren’t many details. Can you elaborate a bit?
Rowan: You’re going to see a plethora of different things. Some will just tidy up (existing functions) to make them work faster or better. And there’ll be new options for entertainment. But I don’t think there’s a massive business model to keep charging your customer for software updates unless they are meaningful. You can say there’s a business car for those who want full autonomous driving (capabilities added later). And if you want to fine tune engine performance through software, that’s going to be an upgrade, as well. Charging (a subscription for) heated seats? Probably not. Some companies have tried and that didn’t work out very well. A software update has to be meaningful and increase the performance of the car but, in most cases, without charging the customer.