2026 Volvo XC40

The Volvo XC40 is the smallest gas-powered SUV in the Swedish automaker's lineup and a stylish alternative to the usual subcompact offerings from Germany. The XC40 slots beneath the compact XC60 and delivers a surprisingly spacious interior despite its small footprint. All XC40s are powered by a turbocharged 2.0-liter four-cylinder engine with mild hybrid assistance, which drives all four wheels via an eight-speed automatic transmission. There's also an all-electric version called the EX40, which we review separately.

Edmunds spotlight: A well-rounded choice

While there isn't one thing the Volvo XC40 does better than any other small luxury SUV, its jack-of-all-trades approach also doesn't reveal any major drawbacks. Its drivetrain provides adequate thrust around town and on the highway while returning good fuel mileage; in our tests, the XC40 beat its EPA-estimated 26 mpg combined rating by nearly 3 mpg. The suspension, though on the firm side, keeps the XC40 planted in turns with the aid of standard all-wheel drive and also delivers a comfortable ride. The cabin is smart-looking and reasonably spacious for both front and rear passengers, though the cargo area is on the small side even by subcompact crossover standards.

Competitors to consider

As an extra-small luxury SUV, the XC40 competes with the BMW X1, Mercedes-Benz GLA and GLB, and the Audi Q3. Compared to the X1 and GLA, the XC40 is less engaging to drive. The slightly larger GLB offers a similar driving experience to the GLA but significantly more interior room. All eyes are on the Q3, as we expect Audi to deliver a redesigned model for 2026.

Though it's showing its age, the 2026 Volvo XC40 is a solid pick in the premium subcompact SUV category for drivers who want a small crossover that's comfortable, drives well, and looks great inside and out.