Volvo’s EX30: Chinese Cars Undercutting Hapless US Domestic Automakers

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Earlier this month, Volvo announced the EX30, an affordable electric crossover. We covered it in several articles, but I wanted to quickly explain why United States domestic automakers are in a bit of peril, and discuss a bit of what they need to do to get out of the pickle they seem to be headed into. Sadly, it’s a mistake that U.S. automakers have made before, and just like it did last time, it could cost them dearly again in the mid-to-late 2020s.

What Makes The EX30 So Appealing

I won’t get into all of the technical details in this article (find them all here), but it suffices to say that the vehicle aims at a very popular niche not only in the United States, but increasingly to a global audience. Small crossovers are really just glorified and beefed-up station wagons, and perhaps even have less interior space for people and storage, but we tend to eat them up because they’re reasonable economical, have higher seats that are easier to get into if your knees aren’t as great as they once were, and they’re not so low to the ground that you feel like pickups and real SUVs are towering around you on the streets.

Many EVs are already aimed squarely at this part of the market. The Tesla Model Y (even if it’s not super high), Chevy Bolt EUV, Nissan Ariya, and several other models give people what they’re looking for, but without a laggy turbocharged three or four-cylinder ICE under the hood.

What really sets the EX30 apart is its price. Starting under $35,000, it actually delivers on the broken promise Tesla seems to keep making and only delivered for a short time with the cheapest Model 3. It does this without sacrificing range, charging speed, or anything else cheaper EVs (often compliance cars) tend to cut corners on. It also doesn’t depend on a range extender, either.

Domestic Manufacturers Are About To Have No Answer To This

The only reasonably-ranged crossover in this price range or below it right now is the Chevy Bolt EUV, and to some extent the Bolt EV (the less SUV-looking version). While they suffer from a lack of DC fast charging speed, the price is still right, with both models selling for below $30,000 before any rebates or tax credits!

But, as we’ve repeatedly pointed out here at CleanTechnica, the Bolts are going away at the end of the year. GM’s going to start offering the Equinox EV (based on the Ultium platform) before the end of 2023, but they’re going to start with the more expensive variants that will run north of $40,000. There’s a promised $30,000 variant, but that one might not arrive for years, and GM has not committed itself to building the base model in any particular numbers.

There are also rumors that there could be some Bolts in GM’s future, but other than that the vehicles would be built on the Ultium platform (if this happens at all), nothing else has been said or confirmed.

The EX30 Isn’t A European or American Car

Before I get into the next part of this story, I do want to note that the Bolt EUV has Chinese roots, as do many domestic cars these days. In the more SUV-looking Bolt’s case, it’s based on the design of the Chevy Menlo, which is similar to the Buick Velite 7, both Chinese-produced GM models. GM doesn’t built EUVs in China, but the basic design formula originates from that market, which helps keep costs low.

But, Volvo’s a Chinese company, and has been a Chinese company for over a decade. Many of their vehicles are still built in Europe and other global production sites (including some in the United States. The EX30 takes the Chinese ownership to the next level, delivering a Chinese-built car to a global audience, including the United States.

There’s nothing inherently wrong with a Chinese-made car, and EX30 buyers are very likely to have a positive experience with their car. But, made in China cars are a new thing for United States buyers.

Imports Ate Detroit’s Lunch Decades Ago

During the 1970s and 1980s, quality problems in the domestic auto industry in the United States created an opportunity for Japanese and later Korean automakers to gain a foothold in the market. Several factors contributed to this situation:

1. Declining quality: At the time, American automakers were struggling with issues related to build quality, reliability, and durability of their vehicles. The focus on cost-cutting and mass production often led to compromises in the quality of materials and workmanship, resulting in cars that were more prone to mechanical failures and shorter lifespans.
2. Fuel efficiency concerns: The oil crisis of the 1970s brought fuel efficiency to the forefront of consumer concerns. American automakers focused primarily on large, gas-guzzling vehicles, while Japanese manufacturers were already producing smaller, more fuel-efficient cars that appealed to consumers looking to save on fuel costs.
3. Innovation and technology: Japanese automakers embraced new technologies and innovative designs, which made their vehicles not only more reliable but also more attractive to consumers. They were quick to adopt features like front-wheel drive, fuel injection, and advanced engine designs that improved performance and efficiency.
4. Customer satisfaction: Japanese automakers placed a high emphasis on customer satisfaction and after-sales service. They built a reputation for providing customers with reliable, well-built vehicles that required minimal maintenance and held their value over time.

As a result of these factors, American consumers began to turn to Japanese imports, which offered better quality, fuel efficiency, and overall value compared to domestically produced vehicles. The growing demand for Japanese cars put pressure on American automakers to improve their offerings, leading to a shift in the industry towards greater emphasis on quality, innovation, and customer satisfaction.

Over time, domestic automakers have made significant strides in addressing these issues and have regained some of the ground lost to Japanese imports. However, the initial quality problems and the subsequent rise of Japanese automakers in the US market serve as a reminder of the importance of maintaining high standards in product quality and customer satisfaction to remain competitive in the global automotive industry.

They’d Better Focus More On Affordable EVs If They Don’t Want Chinese Imports To Destroy Them

The bottom line: If domestic automakers keep waffling on affordable EVs, and can’t deliver anything at or below $30,000 with reasonable specs, Chinese imports are going to undercut them and otherwise gain a beachhead in the U.S. market that they otherwise wouldn’t have gotten.

Quality won’t save American automakers, either. Chinese manufacturing quality has improved drastically, so we can’t expect problems to plague Chinese cars like early Korean imports (the early Kias were notorious for this). So, there’s not going to be any home field advantage there.

Tax credits will also not hold new Chinese imports back by much unless U.S. manufacturers can get prices down to where a point of sale rebate/discount is competitive with the Chinese out-the-door price. Sadly, this looks like something they won’t be doing for years, and may never do if they chicken out and keep selling higher margin cars.

The big risk is that domestic manufacturers won’t just miss out on a few cars for a few years until they can get prices down. The real problem is that during those years when they let MIC cars take lower-end sales, they’re allowing those cars to get in and take market share.

So, American automakers had better buckle down and focus on affordable EVs (especially popular crossovers) if they don’t want to have yet another long-term problem on their hands.

Featured image provided by Volvo.