Trump’s Tariffs Drive Volvo To Build A New Model In The US

Trump-era tariffs are pushing Volvo to regionalize production, shifting more cars to America

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If you’re an automaker importing vehicles to the U.S. right now, you’re not having the easiest time of it. Volvo, for example, has been selling vehicles in America for decades, but nearly 90% of the cars it sells here are still made in Europe. In a world where regionalization, fueled by Trump-era tariffs, has become the new reality, the company is realizing it needs to make a bigger push for domestic production.

More: Volvo’s New S90 Looks Great But You’re Not Allowed To Buy It

And that’s exactly what they’re doing. Volvo is doubling down on its South Carolina factory with plans to build more cars on American soil. Under the leadership of Hakan Samuelsson, who took the reins from long-time CEO Jim Rowan on April 1, the company is eyeing its next U.S. production model.

As of now, the all-electric EX90 is the only car Volvo manufactures locally. Samuelsson has hinted that the next model should have both mild-hybrid and plug-in hybrid versions, meaning it’s likely going to be either the XC60 or the XC90.

No Room for Sedans or Wagons

“A wagon or a sedan is not very likely,” he told Auto News. “I think if you look at what the bestsellers are in the U.S., they are often some kind of SUV. We cannot bring in cars from Europe and just believe they will sell them.”

While Samuelsson didn’t give any clues about when Volvo will settle on which new model to build in America, he did mention plans to visit the U.S. soon to chat with dealers and figure out which model makes the most sense.

“It should be rather quick if we’re going to have an effect on the utilization because we have people there who need something to do,” he added. “With the tariffs, it has been even more negative because the option there for exporting is not as clear anymore.”

In addition to the push for local production, the Trump administration’s tariffs are also influencing Volvo’s sales strategy. Next year, the company plans to stop selling the S90 sedan in America because it’s imported from China. Instead, they’ll focus on their more popular models like the XC40, XC60, and XC90.

While Volvo works on its next U.S.-built model, Samuelsson also emphasized that the company is putting significant effort into pushing the all-electric EX90, with hopes of driving up sales of the vehicle that’s already produced in South Carolina.