Volvo Cuts U.S. Model Lineup Due to Trump Tariffs

Volvo Cars has reduced its US model lineup due to the impact of tariffs imposed by President Donald Trump. The Swedish automaker, owned by China's Geely Holding, has become one of the first major automakers to curb US shipments. The tariffs have squeezed profit margins, prompting Volvo to cut its US lineup.

Volvo Cars, the Swedish automaker owned by China's Geely Holding, has scaled back its U.S. model lineup in response to President Donald Trump's tariffs. The move comes as the company struggles to maintain profitability in the face of increased import duties on European-made vehicles and Chinese imports.

Volvo Cars announced on Thursday that it will now only sell around half of its 13-model global lineup in the U.S. market. The company has halted the sale of sedans and station wagons, opting instead to focus on SUVs. This decision follows a pattern observed across the automotive industry, where automakers are forced to reassess their product strategies due to the impact of tariffs [1].

The tariffs, which include a 27.5% duty on European-made cars and over 100% on Chinese imports, have made it challenging for foreign sellers to compete in the U.S. market. Other automakers, such as Aston Martin and Nissan, have also been affected. Aston Martin has limited its U.S. exports, while Nissan has suspended U.S. production of vehicles destined for Canada [1].

Industry experts have warned that automakers that cannot absorb the cost of border taxes or pass it on to consumers will simply stop selling those models in the U.S. market. Volvo Cars is one of the most exposed automakers to rising tariffs, as the majority of its vehicles are produced in Europe or China [1].

Volvo Cars' decision to focus on SUVs in the U.S. market is a strategic move to maximize profit margins. The company will no longer sell sedans like the S60 and station wagons like the V60 and V90. The V90, one of the last remaining station wagons, has been dropped globally due to declining demand [1].

The company's flagship budget SUV, the EX30, has also been affected. Volvo is only offering the pricier dual-motor version at $46,195 to U.S. buyers rather than the cheaper single-motor version, which was promised to have a sticker price of $35,000, similar to Tesla's Model 3 [1].

The impact of tariffs has been compounded by other challenges faced by Volvo Cars, including software bugs, supply chain snags, and tariff-related delays. These issues have slowed the rollout of its flagship electric vehicles, the EX30 and EX90 [1].

Despite these challenges, Volvo Cars remains committed to its electric vehicle strategy. The company has temporarily halted sales of the European-made electric EX40 but plans to resume them shortly [1].

The tariffs have also affected Volvo Cars' U.S. factory in South Carolina, where the high-end EX90 is produced. The tariffs on European-made components have made it difficult for the EX90 to gain traction with U.S. consumers. Less than 2,000 EX90s were sold in the first half of 2025, despite the factory's capacity to produce up to 150,000 annually [1].

Volvo Cars has stated that it will add its popular SUV XC60 hybrid to the South Carolina factory in 2026, further underscoring its focus on SUVs in the U.S. market [1].

References:
[1] https://www.globalbankingandfinance.com/USA-TRUMP-TARIFFS-VOLVOCARS-6f87e988-f1b3-4b3f-bfe7-83164b2d36ab
[2] https://seekingalpha.com/news/4468194-volvo-cars-cuts-us-model-lineup-as-trump-tariffs-squeeze-profit-margins