Volvo plans to localize production in the US due to tariffs — InsideEVs

Volvo is facing difficulties in achieving profitability in the US market and plans to increase production localization in the United States. The automaker's management stated this during the company's third-quarter report, InsideEVs reports.

Tariffs and consumer sentiment

Volvo Chief Commercial Officer Erik Severinson called the US market difficult for making a profit. According to him, consumer sentiment in the United States is at its lowest level in 50 years.

Volvo CEO Håkan Samuelsson acknowledged that the company should have earlier taken into account the likelihood of tariffs being introduced and the need for greater localization in the United States. He noted that Volvo is working to resolve tariff-related issues in order to strengthen its position in this market.

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Different types of powertrains

Volvo had hoped to support sales with the electric EX60 crossover, which is intended to compete with the BMW iX3 and Mercedes-Benz GLC Electric. However, the model has encountered production difficulties. The company will prioritize deliveries of the EX60 to Europe and other markets where electric vehicle sales are growing faster, so US buyers will have to wait longer for the model.

Samuelsson also stated that electrification in the United States is progressing more slowly than in other parts of the world. Volvo's South Carolina plant, which is currently operating at about 20% capacity and produces the EX90, and will soon also produce the XC60, is expected to receive another model with several powertrain options by the beginning of the next decade. According to the executive, the vehicle must be flexible in terms of choosing an electric, plug-in hybrid, or hybrid powertrain.

According to the publication, Volvo has also withdrawn the EX30 and EX40 electric vehicles from the US market, although they could have provided the brand with significant sales volumes.