Volvo Will Manufacture the Next XC90 in the United States by 2030

• The next generation of the XC90 will be added to the production line, which will also turn out the XC60.

• Estimated production figures mean these two models would almost take up the factory’s entire capacity.

• The electric EX90 and Polestar 3 are currently manufactured there.

Volvo has confirmed it will add production of a “next-gen hybrid model” to its American factory in Ridgeville, South Carolina by the end of the decade.

Nothing has been confirmed yet, but we expect this upcoming hybrid to be the next generation of the XC90 three-row SUV, especially since the Swedish automaker said this vehicle will be “designed to meet the specific demands of the U.S. market”.

Indeed, the XC90 is the brand’s second-best seller in the United States, right behind the smaller and more affordable XC60, which will also be made in South Carolina starting late next year.

This marks a significant change in strategy for the automaker, which chose to end production of the S60 sedan last year in favour of added capacity for the new EX90 and Polestar 3 electric SUVs.

This was meant to maintain these models’ eligibility to federal EV incentives under the Biden-era Inflation Reduction Act, which limited tax credits to EVs built in North America.

With the death of U.S. EV incentives and the threat of tariffs on imported cars and products under the Trump administration, many automakers, including Volvo, saw it fit to review their production planning.

As a reminder, the automaker currently imports 90% of the cars it sells in the United States, mostly from Sweden and Belgium. This means that its two most popular models are currently subject to 15% tariffs.

This has contributed to Volvo Cars’ $1 billion operating loss in the second quarter of 2025 alone, as well as a reduction in its gross margin from 18.2% to 13.5%.

While slow sales of the EX90 and Polestar 3 in North America haven’t helped the company’s financial results, they at least allow it more flexibility in terms of production planning.

Indeed, only about 20,000 vehicles rolled off the Ridgeville assembly line last year, which accounts for just over 13% of the plant’s maximum annual capacity of 150,000 units.

According to AutoForecast Solutions, the XC60 should add about 60,000 vehicles per year and the XC90 should account for about 50,000 additional units.

This means that Volvo could keep its current production levels for the EX90 and Polestar 3 despite also making its two most popular models in the same facility, with a margin of around another 20,000 units to account for higher-than-expected demand for any of these products.

Volvo to Record $1.2 Billion Charge Tied to U.S. Tariffs, EX90 Delays

It is still unclear if U.S.-made XC60s and XC90s would be subject to tariffs in Canada, as the situation is evolving rapidly and the first units of the XC60 coming out of the Ridgeville factory are still more than a year away. If this is the case, the company could choose to continue importing those models from Europe for the Canadian market.

At the moment, the Volvo EX90 and the Polestar 3 are two of only about 15 electric vehicles affected by the Canadian government’s tariff countermeasures since the automaker doesn’t have a manufacturing presence in Canada and their North American parts content is too low to qualify for the CUSMA exemption, at about 20%.

Fortunately for Volvo, adding local production of its two most popular models in North America should help reduce its production costs and its environmental impact, making it a sound decision even if tariffs are taken out of the equation.

Source: Automotive News