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A Properly New Volvo XC90 Is Coming, And It Won't Be All-Electric
Volvo is not going to hit its electric targets, and will need a new ICE XC90 to stay alive. Here's what Volvo said...
Volvo's XC90 SUV has been around forever. And with the release of the EX90 electric version, Volvo (and its fans) probably thought that its end was just around the corner. But now the company has said that it will develop a third generation of the popular model. One that will have a gas engine under the hood, in one of the biggest turnarounds of all in the transition to electric vehicles.
On the company's second-quarter earnings call this week, Volvo CEO Håkan Samuelsson revealed the news. He told investors that "we will need a new XC90." He didn't give any hints as to when the new model might launch, but he did suggest that it was likely that the next generation would be a long-range plug-in hybrid.
"This is something I think European consumers will want to have. Plug-in hybrids with a longer range are a solution that probably we will need for some more years than we thought."
- Håkan Samuelsson, CEO Volvo
Volvo Had Committed To Full Electrification Almost A Decade Ago
Way back in 2017, Volvo was the first company to announce it was going all-in on electrification. That year, Samuelsson announced that every Volvo launched from 2019 would have an electric motor - that included EVs and PHEVs. It also included 48V mild hybrids, the cop-out of electrification.
In 2021, it kicked that plan into overdrive. It said that it would be fully electric by 2030, with even PHEV models getting the boot. It planned for half of its sales to be full EVs by 2025. In 2023, the company said,
"Volvo will not sell a single car that is not full-electric after 2030, regardless of market. There’s no ifs, no buts."
At the end of 2024, Volvo had hit an EV sales rate of 23%. Not bad, but far from the target. Add in PHEV and the company is still shy of 50%.
The Swedish marque will also begin testing a followup to the EX30 this year.
Volvo first launched the XC90 in 2002, very early in the growth stages of the luxury and near-luxury crossover segment. That generation was on sale through 2015, when it was completely redesigned for the first time. That second-generation model, which went on sale in 2015, has been refreshed at least twice, along with other updates, to keep it up to par. Despite its age, the model continues to be a strong seller.
New XC90 Will Likely Come From New XC70
While the latest facelift made it look like its EX90 electric counterpart, the two models are still quite different. The XC90 uses Volvo's SPA architecture while the EX90 uses SPA2.
A platform called SMA from Volvo parent Geely is the likely place for Volvo to start on a new XC90. Volvo is already set to launch a model based on that platform called the XC70. The XC70 is built for China, and it combines a 1.5-liter turbocharged four-cylinder engine with two electric motors and a three-speed transmission. The XC70 makes up to 589 horsepower in its AWD version, and 667 pound-feet of torque. Equipped with a 40 kWh lithium-ion battery, the PHEV is capable of up to 124 miles of range, as measured on the CLTC cycle. The current XC90 PHEV delivers just 32 miles of range on a charge.
It's just the latest hiccup for Volvo, which has managed to be just off the mark multiple times. It posted a $1.2B charge related to halting plans to sell the ES90 in the US over tariffs, its EX90 roll-out was slowed by two years because of software issues, and it is moving production of the EX30 from China to Belgium, again related to tariffs. After record sales last year, Volvo is now slashing jobs amid sales plunging.
The XC60 and XC90 SUVs could come to South Carolina for the first time.
Volvo CEO Samuelsson has a tough road ahead. The executive returned to Volvo earlier this year after leaving that position in 2022 and stepping down as Chair in 2024.
Sources: Volvo