Volvo Cars Says Software Issues Delay Output of Flagship EV

Rafaela Lindeberg, Bloomberg News

Journalists inspect the EX90, a battery-powered sport utility vehicle, manufactured by Volvo Car AB during its launch event in Stockholm, Sweden, on Wednesday, Nov. 9, 2022. The vehicle, featuring lidar sensors to better see its surroundings, has as much as 600 kilometers (373 miles) of range and succeeds the popular XC90 introduced eight years ago. , Bloomberg

(Bloomberg) -- Volvo Car AB will delay the production start of its electric flagship SUV because the company needs more time for software development and testing.

Output of the EX90 is now expected to begin in the first half of 2024, Volvo said Thursday. The Sweden-based carmaker had previously said the car would start rolling off the line in the fourth quarter of 2023. The shares fell as much as 6.4% following the news.

Demand for the car remains high, according to a statement. Putting on the brakes for further work on the vehicle’s software will help ensure a quality experience for all customers, Volvo said.

Carmakers have started to run into trouble on aligning complex development and production schedules for future vehicles decked out with sophisticated digital offerings. Volkswagen AG has delayed key models like the Porsche Macan for at least two years because it couldn’t get the software ready on time, and EV startup Fisker Inc. cut its output forecast after struggling with software integration problems.

In a separate statement, Volvo sister brand Polestar Automotive Holding UK Plc said its Polestar 3 will also be delayed as the model shares the same new all-electric vehicle underpinnings. Production should commence during the first quarter of next year.

Polestar also reduced its forecast for this year to between 60,000 to 70,000 vehicles because of the delay as well as a slowing economic environment. It had previously aimed to make about 80,000 cars in 2023.

Polestar 4 is going ahead as planned with a launch in China in the fourth quarter and other markets in early 2024.

(Updates with shares in second, company comment in third paragraph)