According to foreign media reports, Swedish automaker Volvo Cars plans to start production of two best-selling crossover models in the United States in the next few years to avoid the high tariffs imposed by the United States on imported models, which have seriously eroded the company’s profit margins.
XC60； Image credit: Volvo Cars
At its plant in Ridgeville, northwest of Charleston, South Carolina, Volvo Cars will begin production of the midsize crossover XC60 in January 2027, according to two people familiar with the matter; Volvo’s full-size crossover XC90 is scheduled to go into production in October 2028. Currently, both models are imported from Sweden to the United States.
According to one of the people familiar with the matter, VolvoCarIt is expected to be produced in the United States per year610,000 unitsXC60and510,000 unitsXC90almostwillReached the South Carolina plant15The year of 10,000 vehiclesCapacityUpper limit.
This move will not only help Volvo Cars avoid tariffs, but will also increase capacity utilization at Volvo Cars’ $1.4 billion South Carolina assembly plant. It is reported that the plant only produced about 20,000 vehicles last year, with a capacity utilization rate of only 13%.
A Volvo Cars spokesperson declined to comment on the company’s future production plans, only saying on July 15 that “we look forward to sharing more information soon.”
In the first half of this year, the two crossovers accounted for about half of Volvo Cars’ sales in the United States; Among them, the XC60 was the company’s best-selling model in the world last year, while the XC90 led the US market.
Volvo Cars originally planned to produce the XC90 in South Carolina in 2021, but the plan was eventually shelved as the company shifted to an all-electric strategy to capture post-pandemic market demand and benefited from government policy support for zero-emission vehicles.
Looking ahead, Volvo Cars may also use its South Carolina plant to produce the ES90, a large electric sedan, for export to other countries. It is reported that the ES90 will share the SPA2 platform with the EX90 crossover, which is already produced in South Carolina. Currently, the ES90 is produced in China.
In addition, on July 14, Volvo Cars said it would make a one-time non-cash impairment expense of SEK 11.4 billion (about $1.2 billion) in the second quarter of this year because tariffs prevented it from selling the ES90 profitably in the United States. Due to the EU’s tariffs on Chinese-made cars, the ES90’s profit margins in the EU market continue to be under pressure.
