The CEO of Volvo Cars, Hakan Samuelsson, stated on Friday that customers will likely bear a significant portion of the increased costs caused by rising tariffs. He also warned that if tariffs continue to rise, it might become impossible to import one of the company’s most affordable models into the U.S. market.
U.S. President Donald Trump recently proposed a 50% tariff on goods imported from the European Union starting June 1, citing difficulties in trade negotiations with the EU. Samuelsson explained that such a high tariff would severely restrict Volvo’s ability to sell its Belgium-produced EX30 electric vehicle in the United States.
“That would be almost impossible,” Samuelsson commented, though he refrained from further speculation due to the uncertain nature of the tariff situation.
Tariffs on automotive imports and parts have created significant disruption in the global car industry, with some manufacturers adjusting production strategies to manage added costs, while others wait for clarity on trade policies.
The EX30, which Samuelsson described as being “very severely affected” by tariffs, was initially manufactured in China. Volvo had intended this model to be a competitively priced electric vehicle, with a planned starting price of $35,000. However, heavy duties on Chinese-made vehicles forced the company to postpone its U.S. launch until production began in Ghent, Belgium, earlier this year. The current starting price in the U.S. market has increased to $46,195.
Other carmakers such as Ford, General Motors, and Toyota import vehicles from Mexico, South Korea, or Japan, which could put their lower-priced models at risk if tariffs continue to rise.
Despite these challenges, Samuelsson expressed optimism that the U.S. and Europe will reach a trade agreement soon. “It would not be in the interest of either side to halt trade,” he said.
Last year, around 16% of Volvo’s global sales came from the U.S., with most vehicles imported from Europe. The company plans to increase production at its factory in Charleston, South Carolina, potentially adding a mid-sized plug-in hybrid model in the near future.
Shares of Volvo experienced a 5% decline by mid-afternoon.
