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Home Read a ride Cars/SUVs

Volvo retreats from U.S. sedan market as tariffs bite into profits, strategy

David Ijaseun by David Ijaseun
July 19, 2025
in Cars/SUVs, News
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Volvo retreats from U.S. sedan market as tariffs bite into profits, strategy
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Volvo Cars is scaling back its presence in the U.S. auto market, suspending the sale of several sedans and station wagons, as steep import tariffs pressure margins and force strategic shifts.

Faced with U.S. tariffs of up to 27.5% on European-made cars and over 100% on Chinese imports, Volvo has become one of the first major global carmakers to significantly cut its American portfolio. Only around half of its 13-model global lineup will now be sold in the U.S., with a clear pivot to high-margin SUVs.

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Volvo’s strategic pivot

Volvo, owned by China’s Geely Holding, confirmed that U.S. sales of sedans like the S60 and S90 have been halted. Production of the S60 ended in South Carolina last year. The flagship EX90, a high-end electric SUV starting at $81,290. has struggled with sales, fewer than 2,000 units sold in the first half of 2025, despite a plant capacity of 150,000 vehicles annually.

Its reliance on European-made components, now facing 25% import duties, has hindered profitability, even for vehicles built on U.S. soil. The company has now promised to add the popular hybrid SUV XC60 to its U.S. production line by 2026.

Globally, the company is also phasing out the V90 station wagon amid waning demand and suspending deliveries of the EX40 electric crossover, citing temporary issues. Although the budget EX30 EV was expected to be a U.S. bestseller, only the $46,195 dual-motor version is available, making it less competitive than rivals like Tesla’s Model 3, priced at $35,000.

Profit margin pressure and mixed customer sentiment

Volvo now expects a 6.5% full-year operating profit margin, down from its 7% target. The company remains especially exposed to tariffs, with 48% of its 2024 revenue from Europe, 20% from China, and only 16% from the U.S.

Reacting, Andy Palmer, former Aston Martin CEO, warned that Volvo’s strategy could have unintended effects with some customers will just walk away or ending up with a model they didn’t want.”

Read more on Volvo teams up with Google to pioneer Gemini AI integration in cars

Tags: ChinasedansTariffsU.S.Volvo Cars

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