Where has last year’s momentum gone…
Continued delays in the Volvo EX30 delivery
South Korean consumer complaints are surging
Volvo Korea’s compact electric SUV, the EX30, has recently garnered positive consumer attention. However, due to internal issues, customer deliveries are being delayed. As a result, the company is now considering launching the 2025 EX30 model in South Korea by the end of 2024.
Industry sources indicate that, as of August 11, the EX30, first introduced in Korea in November 2023, was initially expected to start customer deliveries by late June 2024. However, it now appears that deliveries may not begin until after the fourth quarter of 2024. Despite strong pre-order interest driven by its impressive 404 km (251 miles) driving range (based on South Korean standards) and competitive pricing, customers in South Korea will likely have to wait longer than anticipated.
Last year’s progress seems to be faltering
Will it be a year without new vehicles?
Previously, 70,000 EX30s delivered overseas were recalled due to software issues. This has fueled speculation that the EX30’s launch in South Korea might be pushed to 2025. The end of the year and early months are often referred to as the “electric vehicle off-season” due to reduced subsidies for EVs, leading some to suggest that postponing the launch could be a more strategic move.
Volvo Korea might face a year without new vehicle launches if this delay occurs. The company achieved notable success in 2023, securing fourth place in imported vehicle sales in South Korea with 17,018 units sold. However, its plans to build on this momentum with the EX30 are now in jeopardy. While Volvo maintained its fourth-place position in imported vehicle sales during the first half of 2024, a slight decline in sales and market share has raised concerns.
Lexus is gaining momentum
Pre-order customers are leaving
Volvo faces stiff competition in the South Korean market, particularly from Lexus, which is closely trailing the Swedish automaker. Lexus’ newly launched luxury large MPV, the LM500h, has already begun customer deliveries. Pre-orders for the LM500h, totaling around 500 units, might seem modest, but the luxury price range of $70,000 to $147,000 highlights its market impact. This makes Volvo’s fourth-place position in imported vehicle sales quite precarious.
Volvo Korea also faces the challenge of losing pre-order customers. Many consumers are disillusioned by the ongoing delays with the EX30’s delivery and have canceled their contracts. In a market where the perception of EVs is already under scrutiny, such delays exacerbate consumer doubts and prompt ongoing reconsideration of their purchase decisions.
Timing is also inappropriate
Consumers are increasingly uncertain
The recent large-scale fire involving an EV in an underground parking lot in Cheongna, Incheon, has significantly heightened concerns about electric cars in South Korea. This incident has fueled widespread anxiety, leading to a rise in contract cancellations across the EV industry, not just for the EX30.
Even if deliveries of the EX30 were to begin in the latter half of 2024, reaching the anticipated sales targets could be difficult due to the depletion of subsidies. Local government incentives for EVs are nearing exhaustion by the end of the year, which typically leads to a decline in sales. Several regional governments in South Korea, including Sejong City, Pohang City, and Cheonan City, have already exhausted their EV subsidies for the second half of 2024.
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