Volvo Cars, the Sweden-based manufacturer of premium cars, is changing its tactics in the United States. This adjustment follows Northeast Asia’s increasing trade tariffs set by Washington. The corporate giant intends to ramp up output at its new Ridgeville manufacturing facility, just south of Charleston, South Carolina. Volvo Cars is taking a very big step in that direction today by putting the hugely successful XC60 sports utility vehicle (SUV) onto its production line. As Laundry said, this move will deepen its regional market presence “in a big way.”
Volvo Cars has taken the provocative step to change direction. This decision follows the company’s announcement of a disastrous quarter in revenue at a very difficult moment in time. In the second quarter of the year, revenues sank to 93.5 billion kronor. This represented a drop of 101.5 billion kronor compared to 2024’s corresponding period. Separately, the company took a one-off non-cash impairment charge of 11.4 billion kronor, which had already been disclosed in advance. These economic pressures have forced Volvo Cars to reassess its future product plans and production allocation or strategy.
Production of the XC60 is scheduled to start in late 2026. This smart and attractive model has become a best seller overall for Volvo Cars around the globe. Unveiling it at the company’s South Carolina facility will allow the company to minimize operational capacity of the plant.
Håkan Samuelsson, CEO of Volvo Cars, said at last month’s opening that making the most out of the Ridgeville factory was priority number one.
“What we are doing is first of all, we want to fill our factory we have in South Carolina. It should be the strategic asset it was intended to be. So, we have to utilize it more.” – Håkan Samuelsson
The current trade climate has been characterized by heavy tariffs creating a hostile environment to profit in for automotive manufacturers. The U.S. recently slapped a huge 27.5% tariff on European-built cars. They have imposed a punitive 100% tariff on electric vehicles imported from China. These tariffs have forced Volvo Cars to shift its product mix and focus on exporting more cars made in the U.S.
After his testimony, Samuelsson spoke about the challenges of bringing models with higher sales volume to market under these tariffs.
“Second, of course, now with the tariffs, it is very natural to bring in a [car model with] big-selling volume. We are bringing in the XC60 SUV.” – Håkan Samuelsson
Even with these moves though, Volvo Cars has further hurdles to climb as its share price is still more than 20% lower on the year. External economic pressures are building, and internal financial wounds are deepening. These metrics are set to play a large role in the company’s strategic decision-making moving forward.