Selling at a loss: Volvo launches ES90 in Korea at the world's lowest price

Volvo Cars debuted the ES90 in Korea on Wednesday, pricing it below every other major market in a bid to shore up its footing in the Korean imported EV market, where China-made EVs are rapidly gaining ground with low-cost models.

The sticker price undercuts Volvo's major European markets by more than 50 million won ($34,000), a gambit the automaker has openly conceded "comes at a loss" on every unit sold.

The ES90, its first large electric sedan for the Korean market, blends sedan, fastback and SUV silhouettes into a 5-meter-long (16-foot-long) body with a 3.1-meter wheelbase. A panoramic roof comes standard, while the most expensive version offers an electrochromic glass roof that lets drivers dim light transmission at the touch of a button.

The car also tops Hugin Core, the Swedish automaker's electrical architecture, which pairs a central computer built on Nvidia's Orin chip with a Qualcomm Snapdragon-based infotainment system. The setup delivers 254 trillion operations per second, consolidating vehicle functions under a software-centric framework that Volvo says will be continuously refined through over-the-air updates.

"The Hugin Core system, which we have developed with partners like Nvidia and Qualcomm, is able to gather and process data and also act in different situations based on real-time data collection [and] AI algorithms," said Oscar Bertilsson Olsborg, who heads Volvo's 90 product line and its commercial operations in a launch event on Wednesday in central Seoul. 

"It will be the key system for the future for all of us that will save many, many more lives." 

The sedan includes five cameras, five radar units and twelve ultrasonic sensors, enabling lane keeping, parking assistance, blind spot warnings with steering intervention and emergency braking at intersections.

The EV can travel up to 706 kilometers (439 miles) based on European standards. Its Korean certification is still in process with the Ministry of Climate, Energy and Environment. 

With a 350-kilowatt fast charger, the battery can be charged from 10 to 80 percent in roughly 22 minutes.

The sticker price for the ES90 begins at 72.94 million won — more than $34,000 cheaper than most European markets, where the base model starts at 79,995 euros ($91,250). In relatively affordable markets like Australia and China, it fetches around 90 million won.

The aggressive pricing comes as Volvo's sales in Korea have slipped over the years. Volvo sold 7,470 vehicles in the first half of this year, placing it in sixth place, compared to 2022 when it ranked as high as third. Mercedes-Benz and BMW remain entrenched at the top, while Tesla has claimed the No. 1 spot on the strength of its cheaper Model Y, and BYD has risen into fourth place.

"The Swedish krona-Korean won exchange rate has moved 16 percent over the past 2 years, which means our margins have effectively dropped by 16 percent," said Lee Yoon-mo, chief executive of Volvo Car Korea.

"Once you factor in the exchange rate, this price point genuinely means a loss on every car we sell, but through this aggressive pricing strategy, Volvo intends to position itself in Korea as a premium brand on par with the German brands," said Lee. "We hold an ambitious goal of becoming the No. 1 premium EV brand, and the ES90 will be the cornerstone of that effort."

Volvo is targeting sales of 1,000 ES90 units in Korea this year, rising to 3,000 next year.

BY SARAH CHEA   [[email protected]]