Volvo’s CEO Hakan Samuelson has called on the European Union to lower car tariffs for imports into the U.S.
The automotive company, primarily owned by China’s Geely Holding, is currently facing a hefty 27.5% tariff on cars imported into the U.S. In contrast, the EU imposes a 10% tariff on vehicles made in America.
During an interview on Thursday, Samuelson stated, “If Europe is committed to free trade, we can set a precedent by significantly reducing tariffs.” He elaborated, “I think it’s quite unnecessary. The European car industry doesn’t need protection against U.S. car manufacturers.”
Recent actions from the Trump administration indicate a push for domestic manufacturing, claiming that tariffs are part of promoting U.S. automotive success. Trump has threatened to increase taxes on cars made in the EU to 30%, starting August 1st. Earlier in April, he had imposed a 25% tax on car imports, on top of an existing 2.5% tariff. Additionally, there have been extra taxes on car parts.
Compared to the past, when the U.S. only charged a 2.5% tariff on EU-made vehicles, the current situation has become much more complicated.
Volvo, which imports most of its cars from Europe to the U.S., is particularly vulnerable to these customs duties. Consequently, the company plans to shift some manufacturing to the U.S. They recently announced that production of the U.S.’s best-selling hybrid model, the XC60, will begin next year.
Currently, their South Carolina plant focuses only on the Polestar 3 and Ex90 electric models, which have not gained significant sales traction.
According to Reuters, automakers in the U.S. may start reducing their offerings. Samuelson remarked, “These are our decisions—navigating a lack of consensus on tariffs isn’t easy.”
After reporting a significant quarterly profit drop, Volvo’s stock fell by 2.6% on Wednesday, despite exceeding analysts’ expectations. Their adjusted operating profit fell to 2.9 billion Swedish crowns (approximately $297 million) from 8 billion crowns ($899 million) the previous year.
The total margin also declined to 13.5%, down from 18.2% in the last quarter, though adjusted figures showed 17.7% after accounting for one-off impacts. Factors such as tariff-related expenses, increased competition in China, and diminishing demand for electric vehicles played a role in this difficult quarter.
Volvo reported $1.2 billion in impairment charges linked to model launches and tariff delays. This led to an operating loss of 10 billion crowns (around $1.02 billion), higher than the 8 billion crowns recorded in the same quarter last year.
