Volvo’s EX30 is one of the best-selling electric cars in Europe right now, but its start in the American market has been a rocky one.
The premium SUV is compact and, until now, has been built in China — points that have played against it in the US, where tariffs not only delayed its introduction but also made early deliveries less profitable.
On Friday, the first European-built EX30s rolled off the production line in Belgium, easing the tariff aspect of the US problem.
But the Swedish automaker’s newly reinstated chief executive officer still has plenty of other headaches to manage.
Hakan Samuelsson, 74, who began his second stint at the helm of one of Europe’s most recognizable auto brands this month, urgently needs to come up with a turnaround plan.
Dragged down by disappointing sales and model delays, the company has lost two-thirds of its value since its 2021 IPO and has become a target for short sellers.
President Donald Trump’s sweeping 25% tariffs on cars and parts imported to the US are causing upheaval across the sector — but Volvo also faces the additional threat of a total US sales ban because its majority owner, Zhejiang Geely Holding Group, is Chinese.
Samuelsson has already replaced his chief financial officer, sharpened the company’s return-to-office policy, and is considering increasing production in the US.
He is expected to give more hints about his forthcoming strategy as Volvo releases its first-quarter earnings report this week.
“There’s no end to the challenges,” said Handelsbanken analyst Hampus Engellau.
“The main one is how to grow the company, not least in China,” he said, adding that he sees US tariffs as an obstacle, but a navigable one.
While the EX30 is a regional success story, the company still has room to grow in Europe. During the first quarter, its share of new car registrations dropped to 2.5%, down from 2.7% a year earlier.
Volvo is also struggling to attract EV buyers in the highly competitive Chinese market, despite its access to the Geely ecosystem.
Local manufacturers led by BYD dominate, offering sophisticated in-car tech and ultra-fast charging that Volvo and European peers like Volkswagen and Mercedes-Benz struggle to keep up with.
At the company’s annual general meeting on April 3, Samuelsson told shareholders that Volvo should capitalize on its connection with other Geely brands like Zeekr and Lynk&Co.
“We have a unique possibility to do more things together and exploit the synergies,” he said.
The US is important too, though. Volvo sells roughly 16% of its cars there and celebrates its 70th anniversary in the market this year.
Volvo “may be the most vulnerable to global auto trade tariffs among the public companies” as its bonds trade among the tightest in high-yield European autos, Joel Levington, Bloomberg Intelligence’s director of credit research, said in March.
A significant share of the company’s vehicles are still exported to the US from Europe.
Its flagship premium SUV, the EX90 – a critical product for the brand in the US – is already produced in South Carolina and the company is looking to add another model to the factory’s lineup.
But while the EX90 has struggled with software-related delays, competitors have been launching vehicles with 800-volt technology and faster charging.
The company delayed the US launch of the smaller EX30 when the Biden administration imposed tariffs exceeding 100% on EV imports from China last summer.
Adding the EX30 to its Belgian plant has cost about €200 million (R4.25 billion) according to the company.
But the impact of Volvo’s current US issues would be far outstripped by a potential sales ban resulting from new regulations designed to block cyberattacks, which could be applied to cars with systems or software designed or produced by Chinese entities.
Such a ban could be “devastating” for the company and “shockingly cannot be ruled out” as a scenario, SEB analyst Erik Golrang wrote in a client note in January.
In an interview ahead of the AGM, Samuelsson described the potential ban in two parts.
“First, the matter of cars with Chinese components and software, and that I’m sure we’ll manage to handle,” he said.
“But these regulations – we still don’t know exactly where they will land, so it’s hard to say anything at the moment.”
He added that the company had been operating in the US since the 1950s.
Even without a ban, Samuelsson has a lot to juggle in the months ahead.
The CEO needs to focus on cash generation, shift global production and return Volvo’s Ebit margin “to that of a premium automaker,” said Michael Dean, head of global autos for Bloomberg Intelligence.
“This has been made even more challenging due to tariffs,” he added.
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