Swedish car manufacturer Volvo Cars announced that it will begin producing a new hybrid model in the US before the end of the next decade to comply with US President Donald Trump’s high tariffs on foreign vehicles.
According to the company, this model, the details of which have not yet been revealed, will be designed specifically for the US market and will increase capacity utilization at the South Carolina factory.
Strategic Move
Volvo announced last April that it would increase production in the US. In July, it announced that the popular XC60 SUV model would be produced in South Carolina starting in 2026. The factory currently only produces the fully electric EX90 SUV and Polestar 3; however, only a small portion of its annual capacity of 150,000 vehicles is being used.
A Step Back from Electric to Hybrid
Volvo had announced its goal of transitioning to fully electric models by 2030. However, last year, it was announced that hybrid vehicles would remain in the product range. “With the new model, we will better utilize the potential of our local investments and workforce,” said Luis Rezende, President of Volvo Cars America.
Trade Dispute Continues
According to the agreement reached with the EU in July, tariffs on European vehicles in the US will be reduced to 15%. However, since the implementation has not yet begun, vehicles are currently still subject to a 27.5% tariff.
