Volvo is testing a new sedan equipped with roof-mounted LiDAR, but recent spy shots reveal a surprising detail: exhaust pipes. This discovery signals a strategic pivot toward hybrid powertrains amid a broader US market retreat for the Swedish automaker's pure electric ambitions. This shift is critical for US buyers looking for affordable EVs, as Volvo has officially canceled the highly anticipated EX30 and is restructuring its lineup around premium SUVs and plug-in hybrids.
Images published by NewCarScoops show a heavily camouflaged midsize sedan undergoing early-stage testing. While the prominent roof-mounted LiDAR sensor points to advanced autonomous driving capabilities, the visible exhaust system underneath confirms it will utilize an internal combustion engine. Industry reports suggest this could be a refreshed S70 hybrid, aligning with Volvo's confirmed plans to launch updated plug-in hybrid (PHEV) and traditional hybrid versions of the XC40, XC60, and XC90.
The US Market Retreat and EX30 Cancellation
Volvo's pivot back to gas-assisted engines is a direct response to shifting economic realities in the United States. Following the elimination of the federal EV tax credit last September and the Trump Administration's policy changes, importing vehicles from Europe has become financially unviable. Consequently, Volvo is discontinuing the EX30 in the US after the 2026 model year.
The Single Motor EX30 was originally slated to be one of the most affordable EVs in the country, with a starting price of around $35,000. Instead, Volvo has dropped its smallest electric SUV from the US lineup entirely, citing "market conditions and financial factors." Moving forward, Automotive News reports that Volvo will build two new vehicles - a midsize electric sedan and a wagon - in Europe on its new SPA3 platform, with an expected arrival in the second half of 2028.
The 2027 EX60 and Future EV Lineup
Despite the setback with entry-level models, Volvo is pushing forward with its premium electric offerings. The 2027 EX60 is currently on sale, starting at $58,400. As the first vehicle built on the SPA3 platform, it represents Volvo's most technologically advanced EV to date.
The current EX60 lineup features impressive specifications designed to alleviate range anxiety:
- P10 Grade: Currently available, offering an EPA-estimated battery range of up to 330 miles. It supports DC fast charging, adding up to 165 miles of range in just 10 minutes.
- P12 AWD Grade: Launching later this year, this range-topping model will offer an estimated range of up to 400 miles.
- Lease Pricing: The EX60 P10 Plus is listed at $649 per month for 36 months, with $6,309 due at signing.
Additionally, Volvo plans to replace the aging EX40 with the EX50, a larger and more affordable electric SUV that will serve as the brand's new entry-level EV in the absence of the EX30.
The Pragmatic Survival Tactic
Volvo's dual-track strategy - pushing the premium $58,400 EX60 while simultaneously testing a LiDAR-equipped hybrid sedan - highlights the harsh reality of the post-tax-credit US auto market. Without federal subsidies, the math for importing a $35,000 EV simply does not work. By killing the EX30 and leaning back into PHEVs, Volvo is acknowledging that the transition to pure electric will be much slower and more expensive than initially projected.
This is not a step backward in technology; the inclusion of advanced LiDAR on a hybrid test mule proves Volvo is still investing heavily in next-generation ADAS (Advanced Driver-Assistance Systems). Instead, it is a pragmatic survival tactic. By keeping internal combustion engines alive in its sedans and SUVs, Volvo secures the necessary cash flow to fund its long-term SPA3 electric platform, ensuring it remains competitive when the market is finally ready for mass EV adoption.
