The average cost of a new electric Vehicle (EV) is estimated to be more than $60,000. Too bad the average American’s income falls just short of that mark. But this is also part of what makes the announcement that Volvo’s latest vehicle, the EX30, a fully electric sub-compact SUV, so exciting – its starting price is just over $36,000.

But how is this luxury brand electric SUV so much cheaper than similar offers from competing automakers?

A Lesson in The Benefits of Lower Production Costs

Produced in China, under much cheaper labor costs than vehicles made in the United States, the EX30 will not receive US federal tax credits and will be hit with a 25 percent tariff. Since the starting price for its base Model is so inexpensive, it will help the car stay competitive in a marketplace full of luxury SUVs and EVs.

This would not be possible without its initial labor costs being so cheap.

The EX30 also benefits from minimal design elements in its interior. Similar to Tesla, it boasts a clean, minimal interior populated with fewer switches and is highlighted by symmetry (which, in the case of the EX30, allows for a more straightforward production crossover depending on if the steering wheel is needed on the left or right side of the vehicle.)

Also, helping to keep its price low is its smaller size. Compact vehicles are usually priced cheaper.

Base Model Breakdown

Coming with a respectable EV driving range of 275 miles, the base model EX30 also features 268 horsepower.

It’s a single-motor, extended-range EV powered by a single-speed transmission that distributes power to its wheels via a differential. The base (Core) model also features impressive safety features such as a blind spot information system, front and rear collision mitigation systems, and driver alert.

And, of course, no new vehicle today is complete without a nice, large infotainment screen. And the EX30’s Core model is no exception, equipped with a 12.3-inch screen in its central display. The infotainment screen also boasts wireless Apple CarPlay, Google Assistant, and Google Maps.

For just under $42,000, buyers can get the Ultra model with a 360-degree camera and 3D view, Lane Change Assistance, Park Pilot Assist, and upgraded Pilot Assist. Not too shabby, huh?

Going for The Highest Upgrade

For those interested in the best EX30 model available, the Twin Motor Performance version is starting at just over $46,000. Sporting 422 horsepower and an all-wheel-drive, it can launch from zero to sixty in under 3.5 seconds, reportedly making it Volvo’s quickest vehicle ever.

Its EV driving range is estimated to be around 260 miles, and its dual powertrains feed off of a 69-kilowatt-hour Li-NMC battery that can accrue as much as a 70 percent charge in under 30 minutes.

Volvo is expected to bring the EX30 to market next summer.