Volvo’s New U.S. Plan

Volvo’s U.S. Shift

Volvo is making strategic changes in light of the recent 125% tariffs on Chinese imports initiated by the U.S. These tariffs, put into place by President Trump, have significant implications for automakers that produce vehicles in China and then sell them in America. As of April 3, not only are Chinese goods targeted, but vehicles made in other countries face a 25% tariff as well.

Impact on S90

The S90, a sedan manufactured in Daqing, China, is set to exit the U.S. market. In 2024, Volvo sold only 1,364 units of the S90 in the U.S., a figure far too low to justify the high tariffs. Volvo’s total U.S. sales in 2024 stood at 125,243 vehicles, a slight decrease from previous years.

By removing the S90 from its U.S. lineup, Volvo focuses more on its high-performing SUVs like the XC40, XC60, and XC90. These models have seen a 7.5% increase in Q1 2025, with the XC60 leading sales figures.

Production Shift

To counteract tariff challenges, Volvo is ramping up production in the U.S. Their Ridgeville, South Carolina plant is stepping up to produce more of the electric EX90 SUV, which helps reduce import dependencies and costs. An expansion to produce another model at this facility is under consideration, increasing their operational capacity.

Future Plans

While Volvo expects to maintain vehicle prices steady, some incentive adjustments are anticipated. These changes could mean fewer discounts as the brand reallocates financial resources to support their imported models. Consumer demand remains robust, giving Volvo the confidence to tweak its pricing strategy without significantly affecting sales.

Drive Feel

In terms of drive experience, the S90 has been praised for its luxurious ride and refined handling, rivaling even some German sedans. Yet, with its departure, the spotlight turns to Volvo’s SUVs which are known for their spacious interiors and smooth cruising ability – particularly favorable in urban commuting and long highway drives. The XC60 continues to impress with its balance of agility and comfort.

Overall, Volvo’s shift in strategy reflects adaptability to geopolitical pressures, and their focus on electrification and U.S. production might just be a winning formula for future endeavors.