Volvo Cars said on Tuesday it will begin producing a new hybrid model in the US by the end of this decade as the Swedish carmaker continues to adjust to President Donald Trump's tariff policies.
The new model, details of which have yet to be released, will be designed for the US market and help Volvo boost the capacity utilisation at its South Carolina plant, the company said.
Carmakers worldwide are scrambling to rethink their production strategies to contend with Trump's duties on foreign cars, part of his wider policy to boost US manufacturing.
Volvo Cars' CEO said in April the company would produce more vehicles in the US, and the group announced in July it plans to start producing its popular XC60 mid-size SUV at the South Carolina plant from late 2026.
The factory builds only Volvo's fully electric EX90 SUV and the Polestar 3, but production data shows these models take up only a small fraction of the site's annual capacity of 150,000 vehicles.
News of the new hybrid model coincided with Volvo's 70th anniversary in the US.
Volvo, long positioned as an EV trailblazer with the aim of phasing out all non-electric models by 2030, last year reversed course and said hybrids would remain part of its line-up.
“By adding another model into production here, we'll take a big step towards realising the full potential of our local manufacturing investments and workforce,” said Luis Rezende, president of Volvo Cars' Americas operation.
A trade deal struck in July with the EU cut US tariffs on European cars to 15%, but the agreement has yet to take effect, with vehicles continuing to face a 27.5% levy.
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