Volvo will stop selling the EX40 electric compact luxury SUV in the United States after the 2026 model year, shifting its small-SUV strategy back toward the gas-powered XC40 while it prepares a differently scaled EV replacement. The move removes a compact electric model that carried the EX40 name for only two model years, even as the nearly identical XC40 continues to receive investment, including a 2028 refresh.
The Story in Pictures
The EX40 lineage stretches back to models sold as the XC40 Recharge from 2021 through 2024 before Volvo split the badged pair. The EX40 lineup offered an entry single-motor variant with a rear-mounted electric motor producing 248 horsepower and higher-trim dual-motor versions delivering 402 horsepower and all-wheel drive. Despite competent packaging, the battery-powered model never matched the sales of its gas counterpart, a performance gap the company has chosen to address by concentrating on the XC40 gasser while planning a new EV in the segment.
Volvo is expected to replace the EX40 with the EX50, a larger model likely to debut in the fall of 2027 as a 2028 model year vehicle. Reports indicate the EX50 will sit on Volvo’s SPA3 architecture, be slightly longer and taller than the EX40, and target a lower entry price, with a roughly $40,000 starting figure under discussion. That combination of bigger dimensions, a new platform, and a lower price point signals Volvo is repositioning its compact electric offering to compete on cost and interior space rather than a like-for-like continuation of the EX40.
For buyers who preferred the EX40’s Scandinavian-furnished cabin and the sharper acceleration of dual-motor variants, the discontinuation closes a brief chapter in Volvo’s small-EV history. For Volvo, the decision recognises current market realities: the XC40’s stronger sales performance justified a traditional refresh, while the company will seek a different formula for volume and margin in the small EV segment with the EX50.
What happens next is a clear timetable: the EX40 exits the U.S. after 2026, the XC40 returns in refreshed form for 2028, and the EX50 is slated to arrive in late 2027 as the company’s renewed compact EV bid.
