Tariff Threats May Compel Volvo To Increase Car Production In The US | Carscoops

      Volvo is contemplating relocating a portion of its production to the US in light of potential increases in tariffs.

      CEO Jim Rowen mentioned that this decision hinges on the effects of elevated tariffs on cars from the EU.

      Currently, the EX90 is produced in the US, where there is potential for additional models to be incorporated into production.

      The ongoing uncertainty surrounding tariffs continues, affecting not only US automakers but also Volvo. Following the recent launch of its ES90 sedan, the company has revealed that executives are evaluating the possibility of moving production stateside to circumvent the tariffs proposed by the Trump administration.

      As of now, President Trump’s 25 percent tariffs on cars imported from Canada and Mexico are slated to take effect in April, having been delayed for a month due to concerns from Ford, Stellantis, and GM.

      In addition to North American neighbors, European exporters to the US also face tariff threats, with Trump indicating that vehicles manufactured in the European Union could face a similar 25 percent duty.

      In a conversation with Reuters, Volvo’s CEO, Jim Rowen, stated that the company would struggle to absorb a significant tariff increase, which is presently at 2.5 percent. "It appears that percentage may rise... we can manage if it’s 10 percent each way," Rowen explained. "However, a rise to 25 percent would complicate things greatly from a profitability standpoint."

      Volvo is a subsidiary of China’s Geely, but the production of the EX30 has been shifted from China to Europe to evade EU tariffs on Chinese imports. Initially, the plan was to cater to US and European markets from the Ghent plant in Belgium. Nonetheless, if EU-made vehicles face imposing tariffs, production could be transferred to the US.

      Volvo's facility in Charleston, South Carolina, currently produces the EX90 SUV, while several hybrid and fully electric models are imported from Europe. Rowen indicated that the plant is equipped to increase production in the US.

      In addition to the EX30, other models that may be produced in the US include the XC60 and XC90, which share the same platform. "We’ll need to await the tariff announcements, which will guide our decision," Rowen added.