Volvo EX40 Axed in U.S. as XC40 Skips 2027 Model Year
Volvo has quietly ended one of its most affordable electric vehicles in the United States. The EX40 compact electric SUV will not return for the 2028 model year, the company confirmed, leaving the 2026 model as the last one American buyers will see on dealer lots. The news came on September 10, 2026, alongside the reveal of a refreshed 2028 XC40 that Volvo says will carry the small-SUV torch forward — as a mild hybrid, not an EV.
For anyone who has been watching Volvo's U.S. lineup, the decision is less a surprise than a confirmation. The EX40, which spent its first four years as the XC40 Recharge before being renamed in 2024, never gained meaningful traction with American buyers. Volvo sold just 1,724 EX40 and XC40 Recharge units combined in the first half of 2026, according to company figures. That's a rounding error by Volvo's standards.
What makes this moment notable isn't the cancellation itself. It's what the cancellation reveals about Volvo's electric strategy in America — and what it means for buyers who were counting on the EX40 as an affordable entry point into electric Volvo ownership.
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The Model Year Gap Is the Real Story
Volvo didn't just discontinue the EX40. It also skipped the 2027 model year entirely for the XC40, pushing the refreshed version straight into 2028. The current 2026 XC40 and EX40 will have unusually long production runs to bridge the gap, with the refreshed XC40 arriving at U.S. dealerships in early 2027.
Skipping a model year isn't unprecedented. Kia did it with the Telluride before the redesigned 2027 version, Acura skipped 2021 for the MDX, and Jeep dropped the Cherokee for two model years before bringing it back. But those vehicles were being redesigned. The XC40 is only being refreshed — same platform, same powertrain, new skin and updated interior. A model-year gap for a mid-cycle refresh is unusual, and it leaves buyers in an awkward position: the car on the lot is a 2026, and the updated version is more than a year away.
The practical effect for shoppers is straightforward. If you want a gas XC40, you have an unusually long window to buy the current model, likely with discounts as dealers work through inventory. If you want an electric Volvo SUV, the EX40 is a run-out model — the last of its line, with all the resale-value implications that carries.
Why Volvo Pulled the Plug on the EX40
The official explanation from Volvo centers on product positioning. A company spokesperson told Motor1 that the EX60 P6 "represents the new entry point for Volvo EV SUVs, with a very competitive starting MSRP of $59,795, versus the outgoing EX40's $56,545, while providing more of the space and range that U.S. customers demand." That's a $3,250 gap for a larger, newer vehicle with up to 307 miles of EPA range versus the EX40's 296 miles in its most efficient configuration.
The deeper reason is architectural. The EX40 rides on CMA, a decade-old platform it shares with the gas XC40. CMA was engineered as a combustion architecture and adapted for batteries. Volvo is moving its electric lineup onto dedicated EV platforms — the SPA3 architecture that debuted with the EX60 — and the EX40 simply cannot follow. Continuing to build it would mean investing in a platform Volvo is actively phasing out.
Market conditions compounded the problem. The $7,500 federal EV tax credit expired on September 30, 2025, and U.S. EV sales fell sharply afterward — down 27% year-over-year in the first quarter of 2026, according to Cox Automotive data. Battery-electric vehicles accounted for just 6% of new light-duty vehicle sales in the first half of 2026, down from 7% a year earlier. Volvo had already discontinued the smaller EX30 in the U.S. and dropped the coupe-styled EC40 after the 2025 model year. The EX40 was the next domino.
What the 2028 XC40 Actually Offers
The refreshed XC40 is a meaningful update, even if it's not the electric vehicle some shoppers were hoping for. The most visible change is the redesigned front end, with Volvo's signature "Thor's Hammer" LED headlights now extending from the outer edges to the grille. The rear gets reshaped taillights and a new bumper. New 18-, 19-, and 20-inch diamond-cut wheels round out the exterior changes.
Inside, the central touchscreen grows from 9 inches to 11.2 inches — a substantial jump in a cabin this size — and now runs Google Gemini as the voice assistant, capable of handling navigation, finding destinations, and managing messages through natural conversation. A new wireless phone charger and updated interior options, including Arianne Cardamom leather with Brown Ash trim, bring the cabin closer to Volvo's larger models.
The safety hardware is where the real investment shows. Volvo replaced the front and rear radar units, the forward-facing camera, and every parking camera, and added 12 new ultrasonic sensors. The new sensor suite enables Door Opening Alert, which warns occupants of approaching cyclists or traffic before a door is opened; automated lane changes; and a 3D/360-degree parking camera previously reserved for larger Volvos. For a brand that built its identity on safety, rebuilding the sensor suite on a nine-year-old platform is a more significant move than the new grille might suggest.
Under the hood, the U.S. model will be offered exclusively in B5 trim: a 2.0-liter turbocharged four-cylinder mild hybrid producing 247 horsepower and 266 pound-feet of torque, mated to an eight-speed automatic and all-wheel drive. Volvo expects an EPA rating of around 27 mpg combined. Pricing hasn't been announced, but the current 2026 XC40 starts at $41,295 before destination, and Volvo has indicated the 2028 model will remain in the low $40,000 range.
The EX50 Is Coming, But Not Soon Enough for Some Buyers
Volvo's eventual replacement for the EX40 is widely expected to be the EX50, a slightly larger electric SUV built on the SPA3 platform. Reports indicate it will use an 800-volt architecture capable of adding up to 150 miles of range in about 10 minutes, with a targeted range of over 300 miles. Pricing is expected to start in the high $40,000s — potentially undercutting the outgoing EX40 by a meaningful margin.
Production is slated to begin in spring 2027 at Volvo's new $1.3 billion plant in Kosice, Slovakia, which has an annual capacity of 250,000 vehicles. Showroom arrival is expected in the fall of 2027, likely as a 2028 model. That leaves a gap of roughly a year between the EX40's discontinuation and the EX50's arrival — a gap Volvo is filling with the refreshed XC40 mild hybrid, not an EV.
For buyers who need an electric Volvo SUV in the meantime, the options are the EX60 (starting at $59,795) and the larger EX90. There's no affordable electric Volvo for the U.S. market until the EX50 arrives, assuming it does arrive at the expected price.
What This Means If You're Shopping Now
Three practical conclusions follow from Volvo's decision.
For gas XC40 shoppers: You have an unusually long window on the current 2026 model. Dealers will likely offer discounts as inventory ages, and the refreshed 2028 model won't arrive until early 2027. If you're not in a hurry and want the latest tech, waiting makes sense. If you want a deal, the current model is the one to target.
For EX40 shoppers: Understand that you're buying a discontinued model. That's not automatically a bad decision — the EX40 is a capable, comfortable electric SUV with up to 296 miles of range and an 82 kWh battery — but resale values will likely face additional pressure beyond what a typical EV already experiences. The current car is the last of its line, not the beginning of a new one.
For anyone waiting for an affordable electric Volvo: The EX50 is the vehicle to watch. If it arrives at the expected price point with the expected range and charging capabilities, it could be one of the more compelling compact electric SUVs on the market. But that's a 2027 story, and the timeline has plenty of room to shift.
The Bigger Picture
Volvo's retreat from the EX40 is part of a broader recalibration across the auto industry. The company abandoned its pledge to sell only electric vehicles by 2030 in 2024, shifting instead to a target of 90% to 100% electrified sales — a mix of EVs and plug-in hybrids — by the end of the decade. The U.S. market has proven particularly challenging, with EV sales declining after the federal tax credit expired and automakers from Honda to Nissan to Hyundai scaling back or canceling EV programs.
Yet the global picture is different. The International Energy Agency forecasts that 29% of all new car sales will be electric by the end of 2026, driven by markets in Europe and China where EV adoption continues to climb. The EX40 will continue to be sold in other markets, including Europe and the UK, where it remains a strong seller. The model isn't dead — it's just dead in America.
For U.S. buyers, the takeaway is less about the EX40 specifically and more about what its cancellation signals: the affordable electric SUV segment is shrinking, not growing. Volvo's cheapest EV in America now starts at $59,795. That's a price point that leaves a lot of room below it — room that competitors like the Chevrolet Equinox EV and the upcoming Rivian R2 are racing to fill.
Whether Volvo returns to that lower price point with the EX50 remains to be seen. The company has made clear it sees its EV future as upmarket. For now, the EX40's quiet exit is a reminder that in the U.S. electric vehicle market, affordable and available are increasingly two different things.
Sources & Further Reading
- Volvo Cars Media — Official press release confirming the 2028 XC40 refresh and the discontinuation of the EX40 in the U.S.
- Kelley Blue Book — Original report on the EX40 discontinuation, XC40 model-year skip, and pricing details for the outgoing EX40 ($56,545) and EX60 P6 ($59,795).
- Car and Driver — Confirmation from Volvo that the 2026 EX40 is the final U.S. model year; background on EX40 sales performance and the EX50 replacement.
- Motor1 — Volvo spokesperson statement on the EX60 P6 as the new entry-level EV; EX60 range and pricing comparison against the EX40.
- The Verge — Details on the 2028 XC40's Google Gemini integration, 11.2-inch touchscreen, and new safety sensor suite.
- U.S. Energy Information Administration (EIA) — Data showing battery-electric vehicle sales fell to 6% of new light-duty vehicle sales in the first half of 2026 after the federal tax credit expired on September 30, 2025.
- Autoweek — XC40 sales trend data (from 28,143 units at peak to a projected sub-18,000 by end of 2026) and model-year skip context.
- Electrek — EX50 expected specifications including 800-volt architecture, 150 miles in 10 minutes charging, and high-$40,000 starting price.
- Automotive News — EX50 production timeline at Volvo's Kosice, Slovakia plant, scheduled for spring 2027.