Volvo pursues three parallel tracks; there is no optimal solution for luxury brand transformation.

Author | Zhou Zhiyu

At the 2026 Beijing Auto Show, luxury brands’ electrification strategies showed clear divergence. BMW designed its new-generation platform to be compatible with both fuel and electric, Mercedes abandoned the fuel-to-electric conversion of the GLC and dove fully into MB.EA pure electric architecture, while Audi is advancing PPE pure electric and PPC fuel intelligent dual platforms simultaneously. Each company is consolidating architectures and concentrating resources.

Volvo, however, is maintaining three independent architectures in China: the SPA platform supports fuel and plug-in hybrid models, the SMA super-hybrid architecture pushes the XC70 to increase the share of new energy, and the SPA2 pure electric platform uses the EX90 and ES90 to position flagship models. At the Beijing Auto Show, under the banner of the brand’s 99th anniversary, it displayed eight models covering “fuel, electric, hybrid” all at once, with prices ranging from S60 at 159,900 RMB up to EM90 at 598,000 RMB; such breadth and variety are unique among luxury brands.

Smallest in scale, most architectures. This seemingly illogical choice hides a dilemma faced by all traditional luxury brands in this transition period: the fuel-based lineup is still generating most of the cash flow, but if they don’t launch pure electric products ahead of time, it will be too late to catch up once the market flips.

In Q1 2026, Volvo Greater China sold 28,330 units, down 17% year-on-year. But electric vehicle sales reached 7,604 units, up 116% year-on-year, with plug-in hybrid deliveries up 146%. The signals between an increase and a decrease are clear: the fuel-based lineup is shrinking rapidly, while new energy is climbing fast, but the absolute scale of the latter is still far from filling the gap left by the former.

In March 2026, Volvo China’s monthly new energy sales reached 4,128 units, with a sales share just touching 30.1%. A year earlier, this number was less than 15%. The XC70 is the core driving force of this climb, built on the SMA super-hybrid platform, and with cumulative sales exceeding 20,000 units in half a year, it directly rewrote Volvo’s product structure. But looking closely at the sales composition, over 90% of users chose the four-wheel-drive version priced over 300,000 RMB.

This is why Volvo launched the XC70 99th Anniversary Thank You Edition at the Beijing Auto Show, starting at 249,900 RMB, and after a 30,000 RMB trade-in subsidy, the final price is 219,900 RMB. Lowering the price to expand sales, pushing the 30.1% new energy share further upward.

The three architectures each solve problems at different stages. The S60, XC60, S90, XC90 on the SPA platform are Volvo’s foundation in China. Of nearly 150,000 vehicles sold in China in 2025, fuel and older plug-in hybrids still accounted for nearly 70 percent of shares.

The XC70 on SMA architecture is responsible for volume, serving as the turning point driver for new energy share. The EX90 (starting at 539,900 RMB) and ES90 (starting at 429,900 RMB) on SPA2 pure electric architecture serve to stake a claim in the 430,000—610,000 RMB price range, with competitors like NIO ES9 and Zhijie S9 among domestic high-end pure EVs, and Volvo must have products in the segment, otherwise its pure electric flagship position will be locked out.

Preserve profits, push scale, secure position. Three tasks, three architectures, and none can stop now.

Volvo is not the only one running multiple lines.

BMW’s Neue Klasse platform was designed from the start for fuel-electric compatibility; the new-generation iX3 and i3 made their global debut at the Beijing show, but the fuel version 7 Series was updated simultaneously, while the 48V mild hybrid and plug-in hybrid versions did not exit the stage. Mercedes, most resolute in pure electric, dropped the GLC and fully promotes MB.EA, but the new generation S-Class still offers petrol, diesel, and plug-in hybrid power, with not a single fuel version cut from its flagship line. Audi acted most aggressively, with the new A6L officially dropping by 105,000 RMB to launch a price war, while advancing both the PPE pure electric platform and the PPC fuel intelligent platform.

Different postures, same dilemma: the pure electric market is not yet big enough to sustain the full capacity of a luxury brand, but if they don’t plan ahead, high-end domestic new energy brands will lock them out of the game.

BBA’s sales in China declined across the board in 2025, while the market share above 300,000 RMB for Avatr, NIO, and Li Auto continues to expand.

Whether Volvo’s solution will work depends on one critical value: when will the share of new energy vehicles exceed 50%. Before hitting that point, cash flow from the fuel lineup remains the prerequisite for three lines operating in parallel. Volvo’s new energy share was 34.7% in Q4 2025, reaching 30.1% in March 2026; the quarterly volatility shows this climb is not linear, but the direction is certain.

Only after crossing the 50% line will the priorities of the three architectures truly be reshuffled. Until then, “wanting it all” isn’t just Volvo’s choice, but a constraint all traditional luxury brands face during their transformation. The only difference is whether a brand has enough scale to absorb this redundancy, or for some, the window of time is narrower.

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