Volvo exits car subscription business in wake of dropping EV production goals

Volvo has confirmed that it will be phasing out its Care by Volvo car subscription service, winding down operations in the UK.

It is four years since Care by Volvo was launched in the UK, promoted as providing easy budgeting as it covered all the essentials except fuel and optional insurance.

At the time, Volvo said its that consumer research had found that 86% of car buyers had said that the traditional car sales process needs to improve and three-in-four said that they were “bored” of the car buying process. The Car by Volvo sign-up process could be completed "in seconds" at a dealership, but also entirely online.

Within a year Volvo Car UK claimed that 15% of its retail sales volume was via Care by Volvo. At the time, an XC40 T3 Momentum could be had for £559 per month.

There was a clear desire to see it succeed - AM learned that, in some instances, customers were told they had a significant wait for a factory-order new car however if they would sign up to Care by Volvo they could have a car within weeks.

This marks the latest strategic change for Volvo, which recently abandoned its stated goal to become an electric-only carmaker by 2030 and earlier in the year its ambition to achieve half of its global sales through online channels.

"Volvo Cars has begun the process of reviewing local market solutions to transfer active contracts to new partners with the aim of ensuring a seamless changeover of finance providers," the Swedish carmaker said in a statement.

 "The decision to move away from in-house leasing to a partner-based setup is to ensure we are providing products that suit customers' needs, while at the same time ensuring we are allocating resources toward further digitsizing our whole business."

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When Care by Volvo launched, customers were offered a two-year contract for €699 per month. This included maintenance, insurance, tyre changes, and digital concierge services like fuelling, cleaning, and package deliveries to the car.

Despite Volvo's retreat, car subscriptions remain attractive to some consumers, according to a recent study by Deloitte which found that nearly one in three European consumers (31%) would consider a car subscription as a convenient alternative to ownership.

David Bailey, a business economics professor at Birmingham Business School, sees these services gaining popularity, particularly among younger drivers who face prohibitive ownership costs in major European cities.

Jesper Hill-Kjærsgaard, CEO of car subscription service Dribe, noted growing interest from European retailers.

"We’re seeing more dealerships explore this model as a catalyst for both growth and retention," Hill-Kjærsgaard said.

Bailey also believes subscription models will help broaden electric vehicle (EV) adoption, offering consumers a low-risk, flexible way to explore EVs without a financial commitment upfront.