Volvo to halt U.S. sales of China-made S90 sedan after new 125% tariff.
U.S. factory may gain XC90 production as company shifts strategy.
Incentive reductions planned on pre-tariff inventory to manage future costs.
Volvo Cars will soon withdraw the China-made S90 sedan from the U.S. market, as new tariffs imposed by the Trump administration raise the cost of imported vehicles. The automaker is also adjusting its pricing strategy, scaling back incentives on vehicles already in inventory. Depending on how the situation evolves, the ES90 could suffer a similar fate before it arrives.
A person familiar with the company’s strategy said Volvo is expected to cancel S90 orders in the U.S. starting next year. The model, which sold 1,364 units in the U.S. in 2024, has long been a low-volume vehicle in the market. A while back, it was pulled from the Canadian market.
Volvo Adds a Touch of SUV and Fastback to Its Latest ES90 Sedan
The decision follows the U.S. government’s increase in tariffs on Chinese-made vehicles to 125 %, compared to a 25 % levy on autos imported from other countries. Administration officials said the tariffs would remain in place even after other trade restrictions were eased.
Volvo will focus on higher-volume vehicles in the U.S. such as the XC90, XC60, and XC40 crossovers. The company is also evaluating increased use of its Ridgeville, South Carolina assembly plant, including the potential addition of a second model. Volvo currently builds the EX90 electric crossover at the facility and is considering the XC90 as a candidate for local production.
Volvo’s reliance on imports exposes the company to increased trade risk. In the first quarter of 2025, 96.8 % of Volvo’s vehicles sold in the U.S. were sourced from Europe or China. To diversify supply, another Chinese-built model, the EX30 crossover, will begin production in Ghent, Belgium, later this year.
Despite global sales declining 5.7 % in the first quarter, Volvo’s U.S. sales rose 7.5 % year over year to 33,285 units. In a memo to retailers dated April 9, Volvo Car USA and Canada President Michael Cottone acknowledged a challenging global environment and emphasized plans to grow local production volumes.
As part of its pricing strategy, Volvo does not plan to raise retail prices for now but will make minor adjustments to incentives. The company will reduce discounts on imported vehicles already at U.S. dealerships or en route prior to the tariff implementation. Sources said the cost savings will be allocated toward supporting future imports affected by the higher trade levies.
Source: Automotive News
