Volvo Faces Accusations Over Alleged ‘Money-Making Scheme’ as Hybrid Cars Fail After Four Years
A Volvo hybrid owner was saddled with a £7,500 repair bill and a car she didn’t want after its electric motor packed in after less than five years – prompting accusations the Swedish firm is running a ‘money-making scheme’ on eco-conscious owners.
Terri-Anne Smith, who is 37 years old, purchased the advanced XC60 T8 SUV for approximately £40,000 in 2021. She acquired it just under a year since it was first sold when she snagged it from being previously driven by the dealership’s manager as their everyday vehicle.
However, the woman from Rugby, Warwickshire, who has two children, faced an enormous expense when a piece of hybrid equipment known for its unreliable performance broke down at the end of February – just over four and a half years since she acquired it.
Known as ERAD – which stands for ‘electric rear axle drive’ – this electric technology is designed to enable the vehicle to run solely on battery power in urban areas, with a
petrol
Engine engaging during high-speed journeys on the highway.
However, this component is well-known among Volvo owners due to its tendency to fail. Despite this, the Swedish company dismissed all accountability when Ms. Smith raised concerns, attributing the issue to her choice of service center rather than their own product quality.
She entered into a four-year lease agreement for the car, which included a set ‘balloon’ payment of £18,500 at the conclusion of the term if she wished to retain ownership.
In the end, she was forced to cover the cost since the engine remained idle in the garage throughout her ongoing dispute, even though she desperately wanted to get rid of it. She vowed never to purchase anything from the company again.
“I have become incredibly anxious, immensely stressed, and profoundly angry because of this,” she stated to MailOnline.
I typically manage situations pretty effectively, but I needed to let my husband handle this. I informed him, ‘I can’t deal with Volvo; the stress is overwhelming me. I’m finding it all very challenging.’
Mrs. Smith chose the plug-in hybrid due to its capability to operate solely on electric power, along with her belief in the company’s renowned reliability akin to a solid iron structure.
“I might not call myself exactly an eco-warrior, but I felt compelled to lower my carbon footprint. So, I decided to make a positive change and opted for a hybrid car,” she explained.
I wasn’t operating this as a business; I wasn’t trying to save taxes or anything like that. My main goal was simply to attempt doing some good.
For nearly four years, the Nordic hatchback proved hassle-free, comfortably transporting the entire family—husband Lincoln along with his two boys, Ted who is seven and Auro who is four—in both comfort and style.
However, towards the end of February, several weeks prior to when the lease was set to expire, the ERAD unit started producing an awful grinding sound—a source of both embarrassment during drop-off at school and safety concerns, as it had difficulty accelerating from intersections among flowing traffic.
“It was really frightening having two small kids in the back seat of my car, and when I tried to start moving from a junction, it nearly stalled and shut down,” she remembered.
I recall a few days when I did the school run, and it was incredibly cringeworthy—the loud noises, people looking over.
It seemed as though someone pushed a button at the Volvo headquarters. It was akin to saying, “Oh, the four-year mark is approaching,” and then the vehicle entered a limping state.
I mentioned it seemed as though someone was joking around in a Volvo.
Mrs. Smith had her vehicle towed to a Volvo service center in Hinckley, where technicians identified the problem with the ERAD system.
However, they explicitly informed her that it wouldn’t be considered a defect because she hadn’t used their dealership’s service center; rather, she opted to use a nearby garage in Rugby that services the vans for her husband’s company, Custom Heat.
And without any warranty as protection, she received a £7,500 repair bill which she declined to pay.
She went on: “They mentioned it lacked the software updates – those were their exact words.”
‘This might sound naive, but as I’ve never owned a hybrid vehicle before, nobody warned me about needing to service it specifically through Volvo or mentioned there could be consequences for not doing so.’
Despite applying software updates to the vehicle, the ERAD kept malfunctioning. Feeling stressed, Ms. Smith sought solutions online and discovered that many others were also encountering this problem.
She found out that ERAD problems are extremely common, leading to search results for Volvo ERAD being filled with complaints about their well-known propensity to malfunction.
Disappointed proprietors have banded together to highlight the issue.
Matthew Dean, who established the Volvo ERAD Issues Reporting Group on Facebook, also received similar treatment when he purchased a pre-owned XC90 T8 that was consistently maintained at authorized Volvo service centers.
When his ERAD failed and he took it to an independent garage, Volvo offered no assistance and presented him with an £8,000 bill instead.
In the end, he forked over £1,400 due to his extended warranty, yet he argues that the firm needs to do more to assist customers facing hefty charges.
He told MailOnline that ‘Volvo UK showed absolutely no interest.’
He provided a document containing contributions from fellow hybrid vehicle owners, illustrating instances where their vehicles were forced onto car carriers following malfunctions.
Our investigation has uncovered numerous reports across Volvo owner forums and social media groups experiencing comparable problems, with the company often declining assistance in these instances.
Mrs. Smith’s efforts to elicit Volvo’s benevolence were unsuccessful when the company’s UK headquarters declined her petition for a goodwill contribution toward her repair costs—following an initial review of another case concerning yet another vintage vehicle.
“On this occasion, Volvo Car UK has chosen not to provide any additional support for the repair expenses,” the statement read.
This is due to the fact that your XC60 is almost 5 years old and lacks any service record within the Volvo dealership network.
Feeling defeated, Ms. Smith settled the payment. After some discussions, the company decided to purchase the vehicle from her for £22,000, deducting the repair expenses.
She anticipated being £4,000 in deficit, however, Volvo subsequently lowered the invoice as the repairs ended up costing less than initially thought. All things considered, she is more than £800 ahead and feels quite fortunate—although she remains irritated about the situation.
‘I believe that since my car isn’t even five years old and I’m experiencing this issue so early in its lifespan, the responsibility lies with the manufacturer rather than the consumer,’ she stated.
If I had been aware back then, while considering this vehicle, that the ERAD might fail within the initial five-year period and wouldn’t be Volvo’s liability, I wouldn’t have made the purchase.
We’re rather fortunate that we can locate those funds, yet this whole ordeal has been extremely unpleasant. Clearly, they had no intention of assisting.
She plans to inform The Motor Ombudsman about the manufacturer’s lack of assistance regarding what seems to be a widespread issue with Volvo hybrid vehicles.
What baffles her, though, is why the corporation chose not to take further action.
Her main idea is that if the firm acknowledges even one issue with ERAD, it could trigger a wave of lawsuits.
‘I think Volvo are very aware of it,’ she said.
‘The garage in Hinckley did acknowledge it’s not the first ERAD failure they have come across, so it seems like it’s known.
I might consider getting suspicious and assume this is just a way to make money since clearly your aim is to boost sales via your services.
When components break down and individuals lack alternatives, they end up spending additional funds on fixes with your service.
‘From a customer viewpoint, either you’re deliberately doing this to create income, or at worst, even in the most favorable situation, you’re avoiding responsibility regardless of what happens.’
I fail to understand why I ought to bear the brunt of this situation.
MailOnline reached out to Volvo regarding what appeared to be an ongoing issue with their ERAD components. However, the company chose not to respond.
However, regarding Mrs. Smith’s case, a representative stated: “Following our investigation, we can verify that the retailer has consented to purchase the vehicle from Ms. Smith, deducting the repair expenses.”
The store has extended an offer to Ms. Smith, which she has agreed to.
The most recent model of the Volvo XC60 T8 has been designated as
The 10th most dependable hybrid vehicle available in the current market.
as featured in WhatCar magazine in December.
Nevertheless, the publication pointed out that approximately one in every seven owners encountered reliability issues, but all these problems were resolved under the warranty.