2026 Volvo XC40 Brings Back Front-Wheel Drive at a Lower Price

The XC40 B4 with front-wheel drive, but the AWD B5 has a $1,950 price hike from last year

written by Robert Duffer
edited by Steven Ewing
8/12/2025
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Volvo is reintroducing a front-wheel-drive version of the XC40 crossover.
The FWD XC40 also comes with a less powerful B4 powertrain.
This lowers the starting price of the XC40, but all-wheel-drive models are now more expensive.

Volvo has reversed course and reintroduced a front-wheel-drive variant of the 2026 XC40 small SUV, the brand confirmed Tuesday. The move effectively increases the price of the all-wheel-drive XC40 by $2,700.

The return of the FWD model also reintroduces the so-called B4 powertrain, which offers less power but a more affordable point of entry to the popular compact crossover. The front-wheel-drive 2026 XC40 B4 Core and Plus models now come with a 2.0-liter turbocharged inline-four and mild hybrid system that's altogether rated at 194 horsepower and 221 lb-ft of torque.

The new base price for the 2026 XC40 B4 Core is $41,195, including the $1,295 destination fee. That’s $850 less than the starting price of the 2025 Volvo XC40, which was $41,945. But that model had AWD standard and the stronger B5 engine rated at 247 hp and 258 lb-ft of torque.

Now priced at $43,895, the 2026 XC40 B5 gets a significant price hike of $1,950 over the 2025 B5. All told, the all-wheel-drive 2026 XC40 B5 costs $2,700 more than the front-wheel-drive 2026 XC40 B4. The price increases include standard adaptive cruise control and front and rear parking sensors. An over-the-air (OTA) update promises quicker infotainment response time and less lag for the Google Android-based operating system. The OTA update will be made available to all Volvo cars built from 2020 until now.

See 104 2026 Volvo XC40 vehicles for sale near you

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Why Volvo reintroduced the XC40 B4

Why bring back the B4 now when it was discontinued on the 2024 XC40? Affordability, Volvo said, in an exclusive interview with Edmunds.

“We wanted to offer our customers the opportunity to experience Volvo's safety and design at a more affordable price point,” a Volvo spokesperson explained.

Tariffs were not the overt cause.

“Tariffs did not have a role in bringing back the B4 FWD,” the spokesperson said.

Yet, Volvo imports most of the cars it sells in the U.S. from Europe, except for the electric EX90 and the S60 sedan that are made in Charleston, South Carolina. Volvo intends to increase production and build out other models here to “get around the import tariffs,” Volvo CEO Håkan Samuelsson said in April. But that will take about two years.

In May, the Swedish company laid off about 3,000 employees worldwide, representing about 15% of its workforce. The sweeping cost-cutting move is estimated to save Volvo $1.88 billion.

2026 Volvo XC40 is on sale now

The B4 sits at the entry point of the XC40 and is standard for Core and Plus models. The B5 is available throughout the lineup and is standard on the Ultra and the Ultra Black Edition. The 2026 Volvo XC40 is on sale now.

Save as much as $4,575 with Edmunds

2026 Volvo XC40 pricing in Ashburn, VA

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by Robert Duffer

Robert Duffer has been a journalist since the turn of the millennium and has covered the automotive industry since 2013. At the Chicago Tribune, Duffer managed print and online autos content and his weekly automotive column was syndicated to 140 markets nationwide. As Senior Editor at The Car Connection, Motor Authority and Green Car Reports, Duffer amassed thousands of bylines covering the automotive spectrum, from executive interviews to minivan reviews. His favorite car is the next one.

edited by Steven Ewing

Steven Ewing is Edmunds' director of editorial content. An automotive journalist for more than half of his life, Ewing's been on staff at Winding Road magazine, Autoblog, Motor1.com, CNET, and he was the U.S. correspondent for Top Gear magazine. He's also contributed to publications like Automobile magazine, Car and Driver, The Drive, Jalopnik, Porsche Panorama, and more. Ewing has worked in the automotive industry since 2003. From testing prototype cars in the Arctic Circle to spilling a beer on a Formula 1 driver at the 24 Hours of Le Mans (oops), he's always got an interesting story to tell.

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