Volvo mulls moving more production to the US as it anticipates increased tariffs against European cars
by Sam D. Smith
March 5, 2025 at 18:34
- Volvo is open to moving manufacturing of some of its models to the US.
- Volvo’s CEO says the decision depends on the significance of the tariff hike on EU-made cars.
- Currently, the EX90 is made in the US, with the capacity for more models to be added.
The tariff hokey-cokey is continuing, and it’s not just US automakers that are trying to figure out what to do next. Volvo, fresh from the launch of its new ES90 sedan, has confirmed that execs are considering moving production to the US to avoid the Trump administration’s proposed tariffs.
As of this writing, President Trump’s 25 percent tariffs on Canadian and Mexican-imported cars are scheduled to come into effect in April, having been postponed by a month following concerns from Ford, Stellantis, and GM.
Read: After Saying Detroit’s Big 3 Were Excited About Tariffs, Trump Talks To Big 3 And Pauses Tariffs
However, the US’s neighbors have not been the only ones threatened by tariffs. European exports to the US are at risk, too, with President Trump suggesting that cars produced in the European Union would be slapped with a similar 25 percent duty.
Speaking to Reuters, Volvo’s CEO, Jim Rowen, said that the company wouldn’t be able to bear a significant increase in tariffs, which currently sit at 2.5 percent. “It’s looking like that number is going to go up… if it’s 10 percent each way, we can cope with that,” said Rowen. “But if it goes to 25 percent, it’s a hell of a lot more difficult from a profit perspective.”
Volvo is owned by China’s Geely, but the production of Volvo’s EX30 has been moved from China to Europe to avoid the tariffs levied by the EU on Chinese-made cars. The original plan was to serve US and European demand from Volvo’s Ghent plant in Belgium. However, if tariffs against EU-made vehicles are the order of the day, then production may be shifted to the US.
More: 47 Cars Made In Canada And Mexico Are About To See Major Price Hikes
Volvo’s US plant, based in Charleston, South Carolina, already makes the EX90 SUV, while other hybrid and fully electric models are imported from Europe. According to Rowen, the plant has the capacity to move more production to the United States.
In addition to the EX30, other models that could be manufactured in the US include the XC60 and XC90, which are based on the same platform. “We’d have to wait and see the tariff quotes, and then that would help us make that decision,” Rowan said.
