Volvo’s compact SUV family is entering an unusually complicated transition. The automaker is ending the current EX40’s run in the United States after the 2026 model year, even as an extensively updated version of the related XC40 prepares for another chapter in Canada. The shift does not mean Volvo has abandoned electric vehicles. Instead, it shows how differently the company is now managing individual markets as EV demand, tariffs, pricing and consumer preferences reshape the business.
For Canadians, the important detail is that the story is not simply “EX40 out, XC40 in.” The refreshed EX40 is also not expected to come to Canada, while Volvo is putting fresh technology, safety equipment and styling into the mild-hybrid XC40. That makes the compact gasoline-electric SUV an increasingly important bridge between Volvo’s existing lineup and its next generation of dedicated EVs.
The U.S. EX40 Is Ending, but Not Overnight
Volvo has confirmed that the refreshed EX40 will not return to the United States for the 2028 model year. Existing 2026 models have not suddenly disappeared from showrooms; Volvo’s U.S. website still lists the EX40, and remaining inventory can continue to be sold. The distinction matters because this is a product-cycle exit rather than an immediate stop-sale. The current EX40 starts at US$56,545 and can deliver up to an EPA-estimated 296 miles of range in its single-motor configuration, while the twin-motor version produces as much as 402 horsepower.
Volvo told Kelley Blue Book that it continually evaluates customer needs when determining its U.S. product mix. More revealingly, the company pointed to the newer EX60 P6 as its new entry point for electric SUVs. At US$59,795 including destination, the EX60 is only modestly more expensive than the outgoing EX40 while offering more interior space and newer EV technology. That helps explain the decision: instead of spending another U.S. product cycle supporting an aging electric derivative, Volvo can push buyers toward a newer platform designed around electric propulsion from the beginning.
Canada Is Also Preparing for Life After the EX40
Canada is taking a related, though not identical, path. Volvo Car Canada’s September 10 announcement concentrated specifically on the substantially updated XC40, even though Volvo’s simultaneous global announcement covered the XC40, EX40 and coupe-shaped EC40 together. Canadian automotive reporting subsequently clarified the product plan: the refreshed EX40 will not be offered in Canada, and retailers are expected to continue selling 2026 EX40s until existing supplies are exhausted.
That makes Volvo’s Canadian strategy more nuanced than the headline might initially suggest. Canada is not becoming a safe haven for the refreshed EX40 after its U.S. exit. Instead, the XC40 is being given another substantial life extension while Volvo reorganizes its electric portfolio around newer products. Canadian orders for the updated XC40 are expected to begin in early 2027, with first deliveries anticipated by the end of the first quarter. In practical terms, a customer entering a Volvo showroom could soon see the familiar XC40 continuing with updated mild-hybrid technology while the current EX40 gradually disappears from inventory.
Volvo Is Spending Real Money and Engineering Effort on an Older XC40
The XC40 has been around since the late 2010s, but Volvo is not treating its next update like a token grille-and-wheel refresh. The front end receives redesigned Thor’s Hammer Matrix LED lighting, a revised grille, reshaped bumper, different hood and reworked front fenders. New LED rear lamps, an updated tailgate and a redesigned rear bumper alter the other end, while Canadian buyers will have access to new 18-, 19- and 20-inch diamond-cut wheel designs.
Underneath, however, this remains an evolution of the existing vehicle rather than an entirely new generation. Canadian reporting indicates that the familiar turbocharged 2.0-litre four-cylinder continues, producing 247 horsepower. Peak torque is expected to rise modestly from the current 258 lb-ft to 266 lb-ft. That approach is significant. Developing an entirely new combustion-based compact SUV would be difficult to justify while Volvo directs major investment toward EV architectures. Refreshing a proven platform allows the company to keep serving customers who are not yet ready for a fully electric model without committing to another long gasoline-vehicle development cycle.
The Cabin Upgrade Is About Software as Much as Hardware
One of the most noticeable changes appears in the middle of the dashboard. The current Canadian XC40 uses a nine-inch centre touchscreen; the updated version moves to a larger 11.2-inch display carrying Volvo’s latest user interface. Volvo says the revised setup reduces the number of taps required for commonly used functions. There are also changes to the wireless phone charger, cabin lighting, upholstery and trim, including new Cardamom-coloured leather and wood choices.
More important for the longer term is Google Gemini integration. Volvo says the AI assistant will allow drivers to use more natural conversational language when planning routes, identifying stops or handling messages. That represents a broader change in what constitutes a meaningful mid-cycle vehicle update. A decade ago, the focus might have been horsepower, exterior styling and a new stereo. Now a larger screen, improved software and conversational AI can materially change how an older vehicle feels from behind the wheel. For Volvo, those improvements help the XC40 remain technologically credible without requiring an entirely new underlying architecture.
The Safety Upgrade Goes Far Beyond a New Camera
Volvo has also substantially changed the XC40’s electronic view of the road. The updated model uses new front and corner radar units, a new forward camera, new rear-corner radars, 12 new ultrasonic sensors and new parking cameras. Those sensors feed a newer software platform designed to support existing collision-avoidance systems while adding or improving several driver-assistance functions.
Among the new features is Door Opening Alert, which can warn an occupant when opening a door could put a passing cyclist or another road user at risk. The optional Pilot Assist system is being expanded with lane-change assistance and revised road-following behaviour, while the available 360-degree parking camera gains a three-dimensional view. Volvo also describes automatic emergency braking and emergency steering as part of the vehicle’s collision-avoidance toolkit. None of these systems eliminates the driver’s responsibility, and availability can vary by trim and market, but the sensor overhaul helps explain why Volvo is putting substantial development work into an established model. Keeping the XC40 current increasingly depends on computing, perception and software, not merely fresh sheet metal.
Keeping the XC40 Matters Because Canadians Are Still Buying It
There is a straightforward commercial reason to keep investing in the XC40: it continues to sell. Volvo Car Canada delivered 3,974 XC40s in 2025, a 16.2 per cent increase from the previous year. That helped the company reach a record 14,500 total Canadian vehicle sales, up 8.2 per cent. Only the XC60 and XC90 sold in greater numbers within Volvo Canada’s XC family.
The current Canadian XC40 also occupies a useful middle ground. Its B5 all-wheel-drive mild-hybrid system produces 247 horsepower, and Natural Resources Canada testing gives it a combined fuel-consumption figure of 9.1 L/100 km. It is not a plug-in hybrid and cannot travel significant distances on electricity alone; its 48-volt system instead assists the gasoline engine and recovers energy during braking. For a household that likes Volvo’s compact dimensions but remains uncomfortable committing to charging, an updated XC40 provides a familiar option. That customer base is especially valuable while the company restructures the smaller end of its battery-electric lineup.
Canada’s EV Market Helps Explain Volvo’s More Flexible Approach
The Canadian market has supplied plenty of evidence that electrification will not proceed in a perfectly straight line. Statistics Canada reported that new zero-emission vehicle registrations fell 34.7 per cent in 2025 and represented 9.5 per cent of new registrations, down from 14.6 per cent in 2024. Battery-electric registrations alone declined 43.1 per cent. StatCan noted that the comparison was influenced by unusually strong late-2024 demand as buyers anticipated pauses to EV incentives, so the numbers should not be interpreted simply as Canadians rejecting electric vehicles.
Volvo itself had already acknowledged that different markets were moving at different speeds. In 2024, the company replaced its previous goal of selling only fully electric vehicles by 2030 with a target for 90 to 100 per cent of global sales to consist of EVs and plug-in hybrids by that year, leaving room for a limited number of mild hybrids when needed. In 2025, electrified vehicles still represented 46 per cent of Volvo’s global deliveries. The XC40’s extended life therefore fits a strategy built around flexibility rather than abandoning electrification.
The Bigger Question Is What Replaces the EX40
For American buyers, part of the answer is already visible. The EX60 is based on Volvo’s new SPA3 electric architecture and uses an 800-volt electrical system. The U.S.-market P6 has an EPA-estimated range of up to 307 miles, while the P10 AWD reaches as much as 330 miles. Volvo says the P6 can recharge from 10 to 80 per cent in around 16 minutes under suitable high-power charging conditions. Those figures demonstrate just how rapidly EV technology has advanced since the platform underpinning the EX40 was developed.
A smaller model widely reported as the EX50 could eventually fill the space the EX40 leaves behind in both Canada and the United States. Reports have described it as slightly larger than the EX40 and based on Volvo’s newer SPA3 technology, but Volvo has not formally announced the vehicle, so specifications and timing should still be treated as provisional. Meanwhile, the outgoing Canadian EX40 remains a capable EV, offering up to 418 kilometres of NRCan-estimated range, 402 horsepower and a claimed 10-to-80-per-cent DC charging time of about 28 minutes. Its disappearance is therefore less about the EX40 becoming unusable than about Volvo preparing for a newer generation of electric SUVs.
The resulting lineup says a great deal about where Volvo finds itself in 2026. In the United States, the company is removing an older EV as the more advanced EX60 takes over. In Canada, it is giving the XC40 another significant update while allowing current EX40 inventory to run its course. Both moves reflect the same idea: electrification remains the destination, but Volvo is increasingly willing to use different routes—and different timelines—to get there.
