Volvo Cars (VOLCARb.ST) launched its EX30 fully-electric small SUV on Wednesday with two battery options and a starting price of around 36,000 euros ($38,500), as carmakers compete with Tesla (TSLA.O) to make electric vehicles (EVs) more affordable.
The EX30, launched in Milan, is the smallest SUV to date from the Sweden-based manufacturer and follows the unveiling of the larger electric EX90 in November.
The starting price compares with over 40,000 euros for Tesla's Model 3, the U.S. group's cheapest car. Tesla has cut prices several times this year to try to boost demand as competition heats up among EV makers.
Volvo Cars' CEO Jim Rowan has said the group didn't need to follow Tesla on EV price cuts as market demand was healthy.
The carmaker - which aims for half of its sales volumes to be EVs by mid-decade and to only sell EV by 2030 - said the EX30 was one of its biggest business opportunities in the coming years.
"Customers get a premium fully electric SUV for a similar price to combustion engine-powered equivalents," it said.
The model, already available to order in some markets including Europe, is offered with two battery types.
Cheaper and less resource-intensive LFP (lithium iron phosphate) batteries are targeted at clients mostly travelling within cities or over shorter distances, helping to keep the car's entry price down, Volvo said.
More efficient NMC (nickel manganese cobalt) batteries will offer EX30 buyers an extended range of up to 480 kilometres (198 miles). Volvo did not disclose the price for the NMC versions, nor the range for the LFP ones.
It said that, based on initial data in two markets, the total cost of ownership for the new model was lower than that of any other of its fully electric cars and of most competitors in the electric, small SUV segment.
Electric SUVs from European premium brands such as BMW (BMWG.DE), Mercedes (MBGn.DE) and Audi currently cost at least 56,000 euros. The EX30's entry price is comparable to that of the EV version of Jeep's (STLAM.MI) Avenger small SUV.
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