Responding to strong demand for the car, Volvo Cars has decided to start building the new fully electric Volvo EX30 in its Ghent plant in Belgium in 2025, expanding production capacity for its small SUV. The EX30 was revealed to almost universal acclaim earlier this year and has already won several major awards.
Production of the EX30 started earlier this fall in Zhangjiakou, China, and the first cars are scheduled to reach customers later this year. The decision to build the EX30 in Ghent also boosts production capacity for the expected EX30 demand in Europe and global exports. “It reflects Volvo Cars’ ambition to build its cars where it sells them as much as possible,” says the press release.
The decision also adds production flexibility for what the company expects to be one of its best-selling models in coming years. This approach is a proven concept for Volvo Cars, which builds its top-selling XC60 and XC40 SUVs in Europe and China.
“Our ambition is to sell the EX30 around the world at an attractive price point, easing the transition to driving an electric Volvo car for more people while also contributing to company margins,” said Jim Rowan, Volvo Cars’ CEO. “Adding production in Ghent is logical as we aim to capture the strong demand for our exciting small electric SUV globally.”
Crucial role for EX30
Volvo Cars has an ambitious electrification plan to sell only fully electric cars by 2030. By mid-decade, it aims for half of its global sales volume to consist of fully electric cars.
The EX30 plays a crucial role in those plans, as Volvo Cars expects it to contribute significantly to its growth and profitability objectives. This makes the EX30 a cornerstone of Volvo Cars’ ongoing strategic transformation.
“Joining the XC40 and C40 models on the Ghent production line, the EX30 is the third fully electric Volvo model to be produced in Europe. This strengthens Volvo Cars’ electric car production capabilities in the region and underlines the important role of the Ghent plant in the company’s electrification strategy,” Volvo proudly states.
“By building the EX30 also in Ghent, the factory can give an important impulse to the growth ambitions of Volvo Cars and the full-electric target of 2030,” says Stefan Fesser, Volvo Car Gent’s plant manager. “This additional model strengthens our position inside Volvo Cars and makes our plant an indispensable part of Volvo’s worldwide production network.”
In its financial report on Q3 in 2023, Volvo announced that the pure electric sales in Q3 are now at 13% of total sales, almost doubling the performance of Q3 in 2022. Volvo has high hopes that the EX30 will accelerate this tendency even further.
Customer response to models such as the EX30 has been strong, and the small SUV generated higher-than-expected pre-orders. EX30 production started in the third quarter, and the first cars are expected to be delivered during Q4, with production and deliveries ramping up in earnest in 2024.
Overall sales continued to improve during the quarter, with double-digit growth in all three months and sales growth of 22% compared to the third quarter of 2022. “That means Volvo Cars has now reported thirteen consecutive months of retail sales growth, illustrating solid demand for its cars despite pricing pressures in many parts of the world,” says the press release.
Volvo recorded a solid operational performance by increasing its production volumes and revenue for Q3 by 16%. It also saw an increase in operating profits by 75% in the same period. Also, the gross margin continued to improve and came in at 19,6%.
This was helped by improving margins on electric cars, which came in at 9% and was significantly up compared to the last quarter. This underscores that lower lithium prices are starting to have an effect. In addition to lower raw material prices, costs for freight and other logistics have also eased, according to the manufacturer.