- The second-gen XC40 could reverse the brand’s declining sales in the US.
- Volvo sold just 22,651 vehicles in the US last quarter, down 32 percent.
- New electric EX40 will likely be built on the company’s latest SPA3 platform.
Volvo is deep into development of a redesigned XC40, and the plan is to have it on sale in the US next year. Details are still thin, but its arrival confirms something else. The current XC40 and its electric counterpart, the EX40, are sticking around a little longer, with production expected to run through late this year.
Launched in late 2017 as Volvo’s smallest SUV, the XC40 has aged reasonably well, though it’s starting to feel its years. Updates have been minimal, limited to a single light facelift. The next-generation version is expected to widen its appeal with a plug-in hybrid option, sitting alongside the existing mild-hybrid lineup.
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There is more riding on this update than just keeping things fresh. Dealers are counting on the new XC40 to help steady the brand’s footing in the US. Total sales collapsed 32 percent in the first quarter to 22,651 vehicles, while Volvo’s share of the luxury segment slid to 5.8 percent, its lowest point since 2019. The XC40 has been hit especially hard, with sales down 47 percent to just 3,403 units.
More Updates Are Needed
To help keep the XC40 somewhat fresh for 2026, Volvo updated it with a new infotainment system. But if it wants to recapture buyers, it’ll need to make much more significant upgrades to the next-generation model. Auto News reports that the new EX40 will make a major step forward by sharing its SPA3 platform with the electric EX60.
While a new XC40 is just around the corner, some dealers believe Volvo would be better off prioritizing other models, like the XC60 and XC90, as they’re more profitable. “XC40 is a great car, and we appreciate the updates,” one dealer said, before adding that “the US is a big car market.”
Volvo is already putting effort into its larger lineup. The XC60 received updates last year and is set to be built at the brand’s Ridgeville, South Carolina plant starting in late 2026. The XC90, meanwhile, got a second facelift in 2024, with a full redesign also in development. That said, it may not arrive until 2029, leaving the current model to carry the load a while longer.
