Volvo Cars CEO Håkan Samuelsson delivered a stark warning on Friday about the financial burden that rising tariffs could place on consumers. He indicated that a significant portion of the increased costs resulting from new trade levies would inevitably be passed on to customers. More troublingly, Samuelsson suggested that if tariffs escalate further, it might become outright impossible to import one of Volvo’s most competitively priced models into the United States.
This announcement came amid escalating trade tensions, with U.S. President Donald Trump revealing plans to impose a sweeping 50% tariff on imports from the European Union, set to begin June 1. Trump cited ongoing difficulties in negotiating trade agreements with the EU as a driving factor behind this aggressive tariff stance.
Samuelsson, speaking with Reuters, highlighted the profound impact a 50% tariff would have on Volvo’s ability to sell its Belgium-produced EX30 electric vehicle in the American market. “That would of course be almost impossible,” he said, carefully choosing his words given the unpredictable nature of ongoing tariff discussions. Although he refrained from speculating further, his message was clear: the looming tariffs threaten to disrupt Volvo’s U.S. sales strategy.
The global automotive industry is currently in a state of flux due to President Trump’s tariff policies on vehicles and automotive parts. Manufacturers worldwide are grappling with how to adapt—some are revising production locations to minimize tariff costs, while others adopt a wait-and-see approach, hoping for policy changes.
Volvo’s EX30 electric car, initially manufactured in China, has been hit especially hard by these trade barriers. The company’s vision for the EX30 was to offer an affordable, accessible electric vehicle with a starting price around $35,000. However, hefty tariffs on vehicles produced in China forced Volvo to postpone the U.S. launch until production could shift to its Ghent, Belgium plant, a transition completed in April of this year. This shift has significantly increased the EX30’s entry price to approximately $46,195, eroding its original affordability.
Other automakers are facing similar pressures. Brands like Ford, General Motors, and Toyota have traditionally imported lower-priced vehicles into the U.S. from Mexico, South Korea, and Japan. With tariffs clouding the horizon, these companies now face the risk of price hikes that could alienate budget-conscious consumers and disrupt their competitive positioning.
Despite the mounting challenges, Samuelsson remains cautiously optimistic about the future of transatlantic trade relations. He expressed hope that the United States and Europe will reach a constructive agreement to avoid further escalation. “I believe there will be a deal soon,” he said, emphasizing that shutting down trade between these two major economies would serve neither party’s interests.
Currently, the majority of Volvo’s U.S. market vehicles—accounting for 16% of its global sales last year—are imported from Europe. Looking ahead, Volvo aims to boost local production in the U.S. by expanding its factory in Charleston, South Carolina. Samuelsson has previously mentioned plans to introduce a new model at this facility, possibly a mid-sized plug-in hybrid, as part of the company’s strategy to mitigate tariff risks and better serve American customers.
In summary, the shifting landscape of international trade and tariffs is forcing Volvo, along with many other automakers, to rethink how they price, produce, and deliver vehicles to the U.S. market. The potential for soaring tariffs not only threatens to push car prices higher but also risks limiting consumer choice—especially when it comes to affordable electric vehicles like the EX30. The outcome of the ongoing trade negotiations will likely have far-reaching consequences, not just for Volvo but for the entire automotive industry and the customers it serves.
