The XC40 is an important vehicle for Volvo around the world, but it's even more critical in the US where electric sales are slipping. Once upon a time, Volvo was headed to an all-electric future but the last 12 months or so have changed pretty much everything – not just for Volvo but for every major automaker.CarBuzz / ValnetSo when a black XC40-shaped SUV passed by the CarBuzz spy photographers stationed in Spain, they took notice. And well, there's no hiding the fact that this particular prototype has an engine under the hood. The big question is, what might be under there? First Look At The Facelifted Volvo XC40 CarBuzz / ValnetDespite its age, our spy photographers tell us this Volvo is a facelifted model versus something more involved. Perusing the spy photos, it becomes obvious we're dealing with a facelift, and a rather small one at that. Visible changes are relegated to the front and rear, and even then, updated taillights are the crux of the changes at the back. The overall shape of the lenses appears to be the same as the current model, but the internal structure will change.Look further down, though, and you'll see a new rear fascia. Nobody will notice at a glance, but the red reflectors are relocated lower in the bumper. They're thinner, too. And of course, there are the janky exhaust pipes, which are decidedly not factory. We'll talk more about those in a bit.CarBuzz / ValnetMoving to the front, we see there's a bit more happening here. The entire fascia is new, along with the grille and headlights. Details of the grille are still hidden, as are the inner portions of the headlights, but it's obvious that Volvo is recasting the XC40 with the new family design theme. The Thor's Hammer headlight motif is more prominent, and the light housings are edgier versus the softer corners on the current XC40. Conversely, the center grille on the lower fascia is a bit softer on the sides. The main grille should be wider and narrower.There are some changes inside too, though it's harder to spot specifics since we have no close-ups. Peering through the glass we see a larger portrait-oriented touchscreen, extending slightly above the dash. Everything else we can see looks the same as the current XC40 you can buy right now. What's Under The Hood? CarBuzz / ValnetOrdinarily, for such a minor-looking refresh we'd suggest the powertrain will carry over from the current model with little-to-no changes. And that is likely the case here, but those exhaust pipes at the back open up a teeny bit of doubt. Such pipes are often seen on prototypes where some measure of emissions testing is taking place, and that usually happens where there are some mechanical changes afoot.For the record, the XC40 runs a turbocharged 2.0-liter four-cylinder mild-hybrid, making 194 horsepower for front-wheel-drive models or 247 hp in all-wheel-drive format. In either instance, a seven-speed dual-clutch automatic transmission handles gear changes. Thus far, we've heard nothing about a new XC40 powertrain, but we do know Volvo has a slight engine problem – in its push for an all-electric lineup, the automaker no longer has the capability to build its own engines. So there could well be something all-new under the hood when this updated model goes on sale. Debut Could Be A Year Away CarBuzz / ValnetDespite what looks like a near-production prototype, our spy sources don't think a reveal will take place until 2027. Depending on when that reveal happens, you could be looking at a 2028 or even a 2029 model. We're hedging towards 2028, or possibly even 2027 if the reveal is early enough. The XC40 in its current dress has been around for a long time now – pushing a facelift out another couple of years seems counterproductive. CarBuzz Insight – Why This Matters: If Volvo hopes to stay at least somewhat relevant in the US market, at least for the next few years, it absolutely needs a reasonably affordable gas SUV. It's true that Volvo hybrid sales fell 22.9% in 2025, while electric sales climbed 91%. However, that was prior to the EV tax credit going away, not to mention the flurry of off-again-on-again tariffs that still plague every automaker without a solid manufacturing base in the US.Globally, the XC40 and its EX40 EV sibling are among Volvo's best-selling vehicles. In an uncertain market, investing in what works is usually the safe bet. A small refresh with an updated powertrain could be a minimal investment that gives Volvo a handsome return until calmer markets prevail.