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Volvo Cars plans to expand production at its $1.3 billion factory in Ridgeville, South Carolina, shifting assembly of its popular XC60 SUV from Sweden to the U.S. in response to new tariffs under President Donald Trump’s trade policy.

The Swedish automaker said the move will help offset a 15% levy on imported vehicles that replaced a previous 2.5% duty. Producing the XC60 domestically enables Volvo to avoid the higher tariff while also allowing for tariff-free exports back to Europe under preliminary U.S.-EU trade terms.

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Volvo’s Ridgeville facility, designed to produce 150,000 vehicles annually, currently operates at approximately 20% capacity, employing roughly 2,000 employees on a single shift. The company originally pledged to create 4,000 jobs at the plant, a target it now expects to reach by 2030 as additional production lines are added.

The XC60, offered as both a gas-electric hybrid and a plug-in hybrid, has recorded more than 27,000 U.S. sales this year, representing a nearly 20% increase over the same period last year. Volvo executives emphasized that American buyers continue to show strong interest in hybrids, as many are reluctant to entirely abandon gas-powered vehicles.

At the same time, the company has emphasized that long-term growth will stem from EVs, warning that manufacturers who fail to make the transition may struggle to remain competitive.

In Ridgeville, Volvo already builds the $81,000 EX90 electric SUV, though only 2,500 units have sold in the U.S. this year, placing it sixth among the brand’s seven models. A refreshed EX90 debuting next year will include faster charging, adding more than 150 miles of range in 10 minutes, along with new safety and driver-assist features. Volvo also plans to launch a next-generation hybrid, designed explicitly for U.S. buyers, before 2030.

By that year, the company aims for at least 90% of its U.S. fleet to be “electrified,” a category that includes hybrids as well as fully electric vehicles. Volvo, which holds just 1% of the U.S. auto market, generates 20% of its global revenue in America.

Executives also noted that producing vehicles in South Carolina strengthens Volvo’s industrial presence in the U.S. while easing the impact of Trump’s tariffs on imported models and parts.

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The automaker has invested $1.3 billion in its South Carolina factory since 2015, and said it will continue to invest in the plant to bring the 2.3 million square foot facility into operational capacity. The plant’s current capacity is 150,000 vehicles a year.

Volvo said it sold over 27,000 XC60s in the U.S. in the first eight months of this year, a nearly 20% jump from the same period in 2024, so demand for the mid-size SUV remains strong.

Currently, the plant in Ridgeville, South Carolina, assembles two models, the fully electric EX90 SUV and Polestar 3. Previously, the plant built the S60 sedan, but it was discontinued last year amid sluggish sales. Volvo sold 903 S60s in the U.S. this year through the end of August, a 92% decline from the same period last year.

Volvo’s plan to build more vehicles in the U.S. is in line with the company’s strategic initiative to ensure that each region has the products it needs to meet customer demands, according to the release. It includes a more focused approach in terms of product, technology, manufacturing and commercial to better meet the needs of its customers.

“Our investment plans once again reinforce our long-term commitment to the U.S. market and our manufacturing operations in South Carolina,” said Håkan Samuelsson, Volvo Cars’ CEO, in a statement.

Samuelsson previously served as CEO of the company from 2012 to 2022. In March, Volvo Cars announced he was returning to his former role as CEO and president for a two-year term effective April 1. His return will help the automaker navigate “fast-moving technological shifts” and “growing geopolitical complexity,” the company said at the time.

While company executives didn’t disclose details on Volvo’s next-generation hybrid model, Samuelsson hinted that it’s likely to be some type of full-size, hybrid SUV, a segment that’s popular with U.S. consumers.

“This is a bigger size car for primarily for America,” Samuelsson said during a media roundtable with company executives at its South Carolina factory on Sept. 23. “It should [have] room for big families and the luggage and everything they bring, so you could imagine what type of car.”

Samuelsson also said Volvo’s new hybrid vehicles will serve as a “bridge” towards its goal of producing only EVs sometime after 2030, which is later than its initial target of ending ICE vehicle production by 2030. The plans were revised due to slower-than-expected EV adoption, which also led to other automakers revising their short to mid-term electrification goals to meet growing consumer demand for hybrid models.

“If you look at the strategy of our company, we believe we will come out stronger as an electric company after this transformation,” Samuelsson said. “It will take longer than we thought five years ago, and that’s why we need to be pragmatic and have this type of plug-in [hybrid] or bridge solution.”

Following the launch of the new next-generation hybrid model for the U.S., Volvo plans to launch additional hybrid vehicles until EV adoption becomes more widespread and demand increases.

“It’s not just in one [hybrid vehicle] generation,” Samuelsson said. “We need the second generation to bridge also.”

Ramping up vehicle production in the U.S. will also help Volvo Cars mitigate the impact of tariffs, which the Trump administration had previously set at 25% on imported vehicles from the European Union.

However, the levies decreased to 15% on Sept. 5 as part of an agreement reached between the U.S. and the EU, according to a Federal Register notice from the Department of Commerce. The reduced levies became effective Sept. 5 and were later made retroactive to Aug. 1.

In addition to its plans to build more vehicles in the U.S., Volvo commemorated its 70th year in the U.S. market during a factory event this week, which South Carolina Gov. Henry McMaster attended. The automaker has sold over 5 million vehicles in the U.S. since it first started manufacturing vehicles in the country.

“Volvo Cars’ decision to further invest in Ridgeville reinforces South Carolina’s position as a national leader in automotive manufacturing,” Gov. McMaster said in a statement. “We’re proud to continue our partnership with Volvo Cars and look forward to the company’s ongoing success in South Carolina.”

Over the past decade, Volvo Cars has invested $1.3 billion in its Ridgeville facility in the Lowcountry — and it is hinting that even more is to come over the next five years.

With an annual production capacity of 150,000 for Volvo EX90, Polestar 3, and soon, Volvo XC60, the production is not slowing down.

Volvo has announced plans to add a new hybrid model to the Ridgeville plant production no later than 2030. This new model is designed to meet the specific demands of the U.S. market, in line with Volvo Cars’ increased focus on ensuring each region has the products it needs to meet customer demands, according to a news release.

“The Charleston plant is foundational to our strategic growth plan for the U.S.,” Luis Rezende, Volvo Cars’ president of Americas, said in the release. “By adding another model into production here, we’ll take a big step toward realizing the full potential of our local manufacturing investments and workforce, and accelerate progress toward our ambitious commercial targets in the coming years.

The company has sold over 27,000 XC60s prior to beginning production in Charleston, according to the release.

“Volvo Cars’ decision to further invest in Ridgeville reinforces South Carolina’s position as a national leader in automotive manufacturing,” Gov. Henry McMaster said in the release. “It highlights the strength of our workforce and the confidence the world’s top companies have in our state. We’re proud to continue our partnership with Volvo Cars and look forward to the company’s ongoing success in South Carolina.”

Volvo also announced that the North Charleston-produced EX90, its flagship electric SUV, has undergone enhanced hardware and software upgrades. Powered by the company’s new 800-volt electric system, the EX90 can charge even faster, while a core computer upgrade enables new and improved safety, collision avoidance and driver support features, according to the company.

New features include connected safety alerts for slippery roads, hazards ahead, and accidents ahead, along with the integration of automatic e-call functionality with “emergency stop assist,” according to the release.

Emergency stop assist is designed to bring the car to a controlled stop in its lane if the driver fails to respond to attention or hands-off warnings, for example due to sudden illness, the release stated. Once the car is stationary, the new e-call feature will automatically connect the car to an emergency call center linked to Volvo Cars. The center can then speak with the occupants and contact emergency services if needed.

Other new features include expanded automatic emergency steering functionality in darkness, along with “park pilot” assist for parallel parking.

Volvo Cars is continuing to expand its operations at its Ridgeville plant in Berkeley County, with the recent announcement to add a new next-generation hybrid model to the production line before 2030.

This announcement comes two months after the plant released plans that it will also be adding its best-selling XC60 SUV model to the production line by late 2026.

The move is expected to double the plant’s workforce and marks a major step in the company’s long-term U.S. growth strategy and support production amid shifting global trade dynamics.

Currently employing 2,000 people, Volvo’s Ridgeville facility will ramp up hiring in the coming years to help meet a target of roughly 4,000 workers — an obligation tied to more than $200 million in state and local economic incentives.

Here’s what we know about the addition of the new car and what it means for South Carolina.

More cars, more jobs

Volvo’s decision comes as the company looks to localize production of high-demand vehicles.

The company states that the Ridgeville plant now produces less than 5% of U.S. sales volumes, but that within five years, the goal is for the facility to produce more than 50%.

The yet-to-be-named hybrid model, expected before the end of the decade, is being designed specifically for U.S. customers, Volvo states, although details remain limited regarding the make and model of the car.

The XC60, which is set to start production by 2026, is one of Volvo’s most popular models in the U.S. market. Volvo states that 27,000 units were sold thus far in 2025 — roughly a 20% increase from 2024.

The Ridgeville plant, which has a production capacity of 150,000 cars per year, currently makes the all-electric Volvo EX90 and the Polestar 3 SUV. The addition of these two new models will push the plant closer to full production capacity and secure more local jobs.

A shift in global trade

The expansion of both the XC60 and the new hybrid model comes amid shifting global trade dynamics.

Imported vehicles from European nations now face a 15% tariff rate in the U.S., which is an improvement from the former set rate of about 25%.

Still, Volvo’s plans to ramp up production at the Ridgeville plant allow it to mitigate any impact of present or future trade changes, particularly for its high-volume models like the XC60, which is currently built in Sweden and China.

Volvo also states that they have a long-held “build where we sell” strategy, which complements the decision to bolster their South Carolina production.

About the Ridgeville plant

Since breaking ground in 2015, Volvo has invested more than $1.3 billion in the Ridgeville plant.

Recent investments include a state-of-the-art battery pack assembly line and upgrades to the body and paint shops.

The plant began production in 2018 with the S60 sedan, which was discontinued in 2024 due to low demand. The facility pivoted toward electrified vehicles, beginning production of the EX90 SUV and later the Polestar 3.

Volvo Cars was founded in 1927 and now boasts about 42,600 employees worldwide. Headquartered in Sweden, Volvo has additional production plants in Belgium and China.