Two impressive and useful compact luxury SUVs that should be on your radar are the Volvo XC60 and BMW X3. These two compete head-to-head but bring different approaches.

The X3 is the most popular vehicle in the BMW lineup, giving you the athleticism you want combined with excellent features to ensure you’ve got a great vehicle to drive. The XC60 brings the Scandinavian styling and purposeful and well-appointed interior design to the market, giving you an excellent small SUV with a serious focus on safety and security during your drive.

What’s new for 2025?

BMW X3

The latest version of the X3 is almost entirely new with design changes, chassis tweaks, upgraded powertrains, an improved information system, and safety features. There should be an EV version of the X3 that arrives later in the model year. The X3 will now have automated lane change, adaptive cruise control with traffic-light recognition, and parking assistant. There’s also a new Parking Assistant Professional Package that allows the X3 to park itself in a predesignated parking space that’s been saved in the vehicle’s computer system.

Volvo XC60

The XC60 was refreshed for 2024 and it carries over into the new model year with very few changes. There are some minor trim names shuffling that changes the Ultimate trim to Ultra and the Recharge name is no longer used to describe the PHEV models.

The BMW X3 has more changes than the Volvo XC60, but the Volvo was just upgraded a year ago.

What powers each ride?

BMW X3

The X3 30 xDrive model has a 2.0-liter turbocharged 4-cylinder engine boosted by a 48-volt hybrid motor to make 255 horsepower. The M50 is a performance-oriented model with a 3.0-liter turbocharged 6-cylinder engine that has the same hybrid motor to deliver 393 horsepower to the wheels. Both engines use an 8-speed automatic transmission. Both powertrains are set up with AWD to send power to all four wheels.

Volvo XC60

Like the BMW, the Volvo has two different powertrains. The nonhybrid B5 models utilize a 2.0-liter turbocharged 4-cylinder engine with a 48-volt mild-hybrid system that makes 247 horsepower. The T8 models are PHEV units that use turbocharging and supercharging with the 2.0-liter 4-cylinder engine to produce 455 horsepower. Both engines are mated to an 8-speed automatic transmission to give you plenty of power.

The BMW X3 makes a little less horsepower from the base engine than the Volvo XC60, but the upgraded powertrain is where you find more power for the Volvo.

Which luxury SUV has a better cabin?

BMW X3

The X3 has heated, ventilated, and power-adjustable sport seats that are part of the standard equipment at every trim. You’ll have three available color choices for the faux-leather upholstery, and you will have genuine leather in higher trims. There’s ten percent more rear cargo space than before, which means you now have 32 cubic feet of storage behind the rear seats.

Volvo XC60

When you step inside the XC60, you’ll find a cabin filled with impressive styling, rich materials, and the quality features you want to see inside a cabin. This Volvo SUV is quiet and comfortable and gives you roomy seating in both rows. You’ll enjoy the clean lines and high-quality materials that add the Scandinavian flavor you want to enjoy in this SUV’s cabin.

The cabin choice between the BMW X3 and Volvo XC60 comes down to taste, style, and desire, more than one being better than the other.

What about the infotainment setup?

BMW X3

The X3 has BMW’s latest iDrive 9 infotainment system, which is the fastest and most advanced system offered by the brand. It still has a rotary knob but works as a touchscreen to give you the controls you want to enjoy. There’s an optional head-up display, and the BMW Digital Premium allows video streaming and gaming when the vehicle is stopped.

Volvo XC60

Every version of this Volvo SUV has a 9.0-inch touchscreen display running Volvo’s latest Google-based software. You’ll find a slew of personalization options and voice control using the Google Assistant system. The interface responds quickly, and the system has the connectivity features you want to enjoy while you drive.

Many will prefer the Volvo XC60 infotainment system over the BMW X3 because of tits universality and functionality.

Which SUV should you drive?

If you want to drive one of the highest trim versions of either SUV, the Volvo XC60 T8 gives you more power than the BMW X3, but in most other respects, these two SUVs are extremely similar, and the choice will come down to taste.