The tariffs also cause the Swedish car marque to rethink its strategy in the U.S. in terms of its portfolio
The recent tariffs have been haunting carmakers for various reasons and Volvo has had to resort to production job cuts is the latest case in point. Volvo said that it had to eliminate 125 jobs at its Charleston plant in South Carolina due to fluctuating trade policies and tariffs. This is not what the tariffs were brought in for. The point was to encourage carmakers to produce locally in the U.S. Nevertheless, such occurrences are merely collateral.
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New Tariffs Force Volvo To Cut Production Jobs In U.S.
This plant is capable of manufacturing 150,000 vehicles annually. However, at present, the Swedish carmaker only builds the electric EX90 and Polestar 3 at this facility. Volvo didn’t say anything about whether or not these job cuts will impact production. Furthermore, it went on to cite the ever-changing trade policies, tariffs and changing market conditions as the top reasons for the new job cuts.
Interestingly, this doesn’t mean that there will be any changes to its plans of selling EVs in the U.S. In fact, it told Reuters that the U.S. remains an important part of its long-term strategy and it is still committed to boosting local output in the future. Moreover, Volvo also intends to create 4,000 new jobs in South Carolina going forward. Hence, this measure looks like a temporary solution to curtain expenses in times when business is not entirely thriving.
Yet another aspect which suggests that Trump’s tariffs have pushed Volvo to rethink its strategy is the fact that it will reportedly quit selling the S90 sedan in America from next year. The reason is quite simple – the S90 is imported from China. To keep the business strong, it will most likely add EVs like the XC60 and XC90 to the lineup to cater to new customers.
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Learn Electric Cars Says
It is evident that the tariffs have caused an upheaval for many carmakers in the U.S. While in the long run, the U.S. wants to boost its local economy with this step, the current situation is extremely tricky and challenging for most companies. In fact, EV startups like Rivian played it smart by importing battery cells from China before the elections. This was a smart step to create some buffer. Let’s see how things pan out in this regard in the future.