Volvo’s first electric car priced to move starting at $54,985

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Volvo Car USA’s first all-electric vehicle is priced to move, even if it might not get very far on a full charge.

The 2021 XC40 Recharge P8 compact crossover will start at $54,985, including a $995 shipping charge, when it goes on sale early next year.

The battery-propelled version of Volvo’s XC40 compact crossover delivers 402 hp and an EPA-estimated 208 miles.

The XC40 EV is more than just Volvo’s newest model. It is at the forefront of a wave of emissions-free models expected from the Swedish automaker.

Volvo wants battery-powered vehicles to account for half of its global sales by 2025.

“We have decided that electrification is the way of the future,” Volvo Car USA CEO Anders Gustafsson told Automotive News.

As it rolls out its EVs, Volvo’s focus will be on profitability rather than market share.

“My expectation for the XC40 [Recharge] is that we cannot sell as many as customers would like to buy,” Gustafsson said. “I don’t want to have price pressure. I don’t want to have the cars parked outside of any dealers.”

New Jersey Volvo dealer Matthew Haiken described the XC40 Recharge P8 as a halo vehicle for the brand’s electrification ambitions.

“We need a BEV right now because we talk about it so much,” said Haiken, owner of Prestige Volvo in East Hanover, N.J.

But the dealer is still not sure U.S. consumers are ready to adopt electric vehicles en masse. “Nobody out there has done the volume,” Haiken said.

Hobbled range

The XC40 EV is targeted at a market sweet spot. Compact crossovers accounted for a 21.8 percent share of luxury vehicle sales in the first nine months of the year, according to the Automotive News Data Center.

With a starting price of $54,985, including destination charges but before government incentives, the XC40 Recharge P8 slips in below some of its luxury competitors on price.

The Jaguar I-Pace crossover starts at $71,000, including destination but before tax credits, while the Audi E-tron Sportback retails from $66,995, including destination. The Tesla Model Y undercuts them all with a starting price of $51,190, including destination, but the Tesla does not qualify for the $7,500 federal tax credit that the others do.

But in another crucial metric, Volvo faces a competitive disadvantage.

The XC40 EV’s range of 208 miles trails the competition. The Model Y leads the pack with 326 miles, followed by the I-Pace at 234 miles and the E-tron at 222 miles.

If Volvo executives are having 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,” the CEO said. “A normal customer, they don’t spend four hours in the car every day.”

Luxury brands have struggled with their electric compact crossovers in the U.S., where driving range remains a major barrier to adoption. In the first nine months, Audi has sold 5,168 E-tron Sportbacks, while Jaguar delivered 1,546 I-Pace compact crossovers.

Earlier this year, BMW nixed plans to bring its iX3 electric compact crossover to the U.S., in part because of the model’s limited range. The crossover has a 285-mile range based on European testing standards.

Mercedes-Benz also seems hesitant to launch its EQC compact crossover here. The EQC, originally scheduled to arrive in the U.S. early in 2020, was delayed by a year. But, a source told Automotive News last week, the launch could now be delayed to 2022.

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