Volvo Cars is recalling over 40,000 of its flagship electric EX30 SUVs after revealing a risk of their battery packs overheating, a development that could significantly dent the Swedish automaker’s hard-earned reputation for safety and potentially cost millions.
The previously unreported recall, confirmed by the company to Reuters on Monday, involves replacing modules within the high-voltage battery packs of the compact SUV.
This model is crucial to Volvo’s strategy for competing with cheaper Chinese brands, making battery safety a particularly sensitive issue for the manufacturer and consumers alike.
A total of 40,323 EX30 Single-Motor Extended Range and Twin-Motor Performance cars, equipped with these specific high-voltage cells, are affected by the issue. Volvo, which is majority-owned by China’s Geely, stated the recall addresses the potential overheating risk.
“ We are now contacting the owners of all affected cars to advise them of next steps,” Volvo VOLCARb.ST said.
Volvo Cars’ shares were down 4% following the Reuters report about the recall.
In the rush to develop new EVs, some automakers have faced battery defects. In 2020, a fire risk forced General MotorsGM.N to recall 140,000 Chevy Bolts with batteries supplied by South Korea’s LG Electronics, costing $2 billion to fix.
Volvo’s battery issues come as the carmaker pursues a 1.9 billion dollar savings drive and deeper integration with parent Geely. The batteries were made by a Geely-backed joint venture, Shandong Geely Sunwoda Power Battery Co. Volvo said the supplier has fixed the problem and would supply the new battery cells.
‘They have to get it right’
Volvo said it would replace affected units free of charge, urging owners in the meantime to continue limiting charging to 70% to eliminate the fire risk.
“The EX30 especially is very important to Volvo, so they have to get it right,” said Sam Fiorani, vice president for global vehicle forecasting at research firm AutoForecast Solutions.
Since December, Volvo has told EX30 owners in more than a dozen countries including the United States, Australia and Brazil to park away from buildings and cap charging at 70%, according to regulatory filings and the company.
Andy Palmer, an industry veteran who oversaw the launch of Nissan Motor’s 7201.T Leaf EV in 2010, said Volvo has less room for missteps than rivals as its reputation for safety is central to its identity.
“Volvo can’t afford a safety issue because that strikes at the heart of their brand,” he said.
Potentially steep price tag to fix battery issue
The new replacement battery modules could cost $195 million, excluding logistics and repair costs, according to a Reuters analysis based on what a Chinese battery maker might charge. Volvo said the calculations were “speculative in nature”, and that the automaker was in talks with the supplier.
Prior to news of the recall, Reuters spoke to two EX30 owners who wanted to return their cars, underscoring the potential impact.
British insurance agent Matthew Owen said he chose the EX30 for its range and Volvo’s safety reputation, adding the automaker should take responsibility because it is “producing a car that is dangerous”.
Tony Lu, an EX30 owner in New Zealand, said he faced higher costs because the charging cap had cut the car’s range.
“I would be absolutely delighted if they bought the car back,” Lu said.