Volvo Cuts Electric EX40 from US Lineup, Refreshes Gas-Powered XC40
The Swedish automaker is retreating from the entry-level EV segment in America while updating its smallest combustion SUV with Gemini AI and new sensors.
Volvo is pivoting its American strategy for the 2028 model year, canceling the all-electric EX40 in the United States while launching a significant refresh of the gasoline-powered XC40. The move marks a strategic shift in how the company approaches the entry-level luxury SUV market domestically.
For U.S. buyers, the XC40 will now be limited to the B5 trim. This version utilizes a 2.0-liter turbocharged four-cylinder engine producing 247 hp and 266 lb-ft of torque, supported by a mild hybrid system. While the all-electric EX40 is being removed from the U.S. market, Volvo confirmed it will remain available to international customers. The updated combustion-powered XC40 is expected to arrive at American dealerships in early 2027.
Tech and Safety Overhaul
The refresh focuses heavily on software and hardware updates to modernize a platform that dates back to 2017. Inside, Volvo has replaced the previous 9-inch center display with a larger 11.2-inch screen. This system runs Android Automotive and now features integration with Google Gemini AI to enhance the user experience.
Safety hardware has also seen a comprehensive upgrade. The 2028 model introduces high-resolution cameras, updated radar, and ultrasonic bumper sensors. According to Volvo, these additions enable a new 3D vehicle view and allow the Pilot Assist system to perform automated lane changes. "By enhancing the XC40’s design, technology and safety features, we’ve created the best version of the XC40 yet," said Akhil Krishnan, Interim Lead for the 30 and 40 Series at Volvo Cars.
A Strategic Retreat
This decision signals a notable retreat from the entry-level electric vehicle segment in the U.S. Just a few years ago, Volvo rebranded the electric version of this SUV as the EX40 to align with its new EV nomenclature, which includes the EX30, EX60, and EX90. By removing the EX40 from the U.S. while continuing to push larger electric offerings, Volvo is effectively returning the XC40 to a combustion-focused role in the American market.
Industry analysts suggest this shift may be a response to tepid EV sales or manufacturing constraints. By leaning on software updates and advanced safety tech, Volvo is attempting to keep the aging XC40 platform competitive against newer rivals without the risk of a low-margin electric variant in a challenging domestic market.
What to Watch
While the technical specifications and the removal of the EX40 are confirmed, specific pricing for the 2028 model year has not yet been detailed. Observers will be watching to see if this retreat from the entry-level EV space is a temporary adjustment or a permanent change in Volvo's U.S. electrification timeline. For now, the focus remains on the 2027 arrival of the B5 trim as the sole representative of the 40-series in the U.S.