Volvo Cars CEO Warns of Rising Tariffs Impacting Affordable EVs in the U.S.

Volvo Cars’ CEO, Hakan Samuelsson, has raised concerns over looming tariffs that could significantly increase costs for electric vehicle (EV) buyers in the United States. In a recent statement, Samuelsson highlighted the challenges of maintaining affordability for models like the Volvo EX30 amid a proposed 50% tariff on European imports, as reported by Reuters.

Tariffs Threaten Volvo EX30 Availability

The Volvo EX30, a compact electric SUV, has already faced pricing hurdles due to tariffs. Initially produced in China with a starting price of $35,000, the EX30 saw its U.S. market entry delayed due to hefty tariffs on Chinese-made vehicles. Production was shifted to Ghent, Belgium, in April 2025, but the price has now risen to $46,195. Samuelsson told Reuters that a 50% tariff on European imports would further complicate the situation. “That would of course be almost impossible,” he said, referring to the potential impact on the EX30’s availability in the U.S. market.

This tariff threat stems from U.S. President Donald Trump’s recommendation on May 23, 2025, for a 50% duty on goods from the European Union starting June 1, citing trade imbalances. For Volvo, this could severely limit the ability to offer competitive pricing on its more affordable EV models, particularly those manufactured in Europe.

Volvo’s Global Production Strategy Under Pressure

Volvo Cars operates factories in several key locations, including Ghent, Belgium; Gothenburg, Sweden; Charleston, South Carolina; and multiple sites in China, such as Chengdu and Daqing, as shown in a production map from the Reuters report. The company also has a facility in Taizhou, China, operated by Geely Auto, its parent company. In 2024, Europe accounted for 48% of Volvo’s sales, followed by China at 20% and the U.S. at 16%, with the remaining 15% from other markets.

The Charleston factory in South Carolina is a critical part of Volvo’s U.S. strategy. The company plans to increase production there by adding a new mid-sized plug-in hybrid model, aiming to reduce reliance on imported vehicles. However, with 16% of its U.S. sales currently sourced from Europe, the proposed tariffs could disrupt this balance, forcing Volvo to either absorb costs or pass them onto consumers.

Implications for EV Buyers and the Industry

For EV enthusiasts and buyers, the rising costs could make vehicles like the EX30 less accessible, particularly for those seeking affordable options in the electric SUV market. The EX30, which Samuelsson described as “very severely hit” by tariffs due to its initial production in China, exemplifies the broader challenges facing the EV industry. Competing vehicles from automakers like Ford, General Motors, and Toyota—often imported from Mexico, South Korea, or Japan with lower price points—are also at risk as tariff uncertainties loom.

Samuelsson remains optimistic about a resolution, stating, “I believe there will be a deal soon. It could not be in the interest of Europe or the U.S. to shut down trade between them.” However, until an agreement is reached, the EV market faces a tough balancing act. Rising costs could slow adoption rates, particularly in the U.S., where affordability remains a key factor for mainstream EV buyers.

What’s Next for Volvo and EV Owners?

Volvo’s focus on expanding production in Charleston signals a long-term strategy to mitigate tariff risks. For EV owners and prospective buyers, this could mean more locally produced options in the future, potentially stabilizing prices. However, the immediate threat of tariffs underscores the need for stable trade policies to support the growth of the EV sector. As the industry navigates these challenges, buyers may need to brace for higher prices on imported models until global trade tensions ease.

Photos courtesy of Volvo