BMW X3 vs Volvo XC40

Since its inception in 2003, the BMW X3 has grown to become one of the brand’s top sellers. And starting with its second generation (circa 2010), the luxury compact crossover has been built at BMW Spartanburg—the automaker’s only manufacturing facility north of the Mexican border. Incidentally, because Spartanburg is the global producer of every gas-powered BMW crossover besides the X1 and X2, the plant also boasts the highest production numbers of any BMW plant worldwide. One can speculate that the popular X3 has a lot to do with that.

Last redesigned for 2018, the X3 receives a rather hefty mid-cycle refresh for 2022. Updates include design tweaks, new engines, more technology, and an expanded suite of safety features. (Interestingly, while the BMW X3 xDrive30e plug-in hybrid has been dropped from the lineup in the United States, it continues in 2022 in Canada. This model is not covered in this review.)

In Volvo speak, “40” denotes an entry-level model. While the Swedish automaker no longer rosters the S40 sedan or V40 wagon in North America, the XC40 subcompact crossover remains to compete with the likes of the Audi Q3, the BMW X1, the Lexus UX, and the Mercedes-Benz GLA for aspiring luxury-car owners’ dollars.

The XC40 was unveiled in 2017, arriving as a 2019 model, and it hasn’t undergone a redesign since. An all-electric Volvo XC40 Recharge variant joined the lineup as a 2021 model. Volvo’s other current EV, the C40 Recharge, is also broadly similar to the XC40 models, but with a coupe-like body style.

For 2023, Volvo gave the XC40 several notable updates, including new mild-hybrid powertrains, revised styling, and the Android-based infotainment system previously seen on the XC40 Recharge and other Volvo models.

The mild-hybrid lineup includes base Core, mid-level Plus, and top Ultimate trim levels, with standard B5 all-wheel drive (AWD) drivetrains (the B4 front-wheel drive, or FWD, version offered in the US is not available in Canada). This Volvo XC40 review is based on the Ultimate trim in B5 AWD spec.