Volvo to add new hybrid model produced in US as tariffs pressure auto supply chains

Volvo Cars announced Tuesday that it will produce a new hybrid model in the United States, expanding its Ridgeville, South Carolina plant near Charleston to localize more of its lineup as tariffs on imported autos continue to pressure supply chains. The company said it plans to add the next-generation hybrid to the production line at Ridgeville before 2030, as part of its broader U.S. growth strategy.

"The Charleston plant is foundational to our strategic growth plan for the US," said Luis Rezende, president of Volvo Cars Americas, in a Tuesday statement. "By adding another model into production here, we’ll take a big step toward realising the full potential of our local manufacturing investments and workforce, and accelerate progress toward our ambitious commercial targets in the coming years."

At present, the Ridgeville facility produces only Volvo's fully electric EX90 SUV and the Polestar 3, with Volvo signaling a broader push to bring hybrids into its U.S. lineup. The move aligns with the automaker's 70th anniversary in the United States and underscores the company's intent to deepen its manufacturing footprint at a site that has been pivotal to its U.S. business.

Tariffs on imported vehicles remain a central pressure point: the current import tax sits at 27.5%. The White House struck a trade deal in July with the 27-nation European Union that would slash tariffs on foreign cars to 15%, but the policy environment remains uncertain as executives reassess supply chains and sourcing. Volvo's move is part of a broader trend among automakers to localize production to preserve margins and meet U.S. demand.

Volvo has already signaled a broader production ramp in the United States. In July, the company said it will start producing the XC60 mid-size SUV at the Ridgeville plant starting in late 2026, adding to its lineup and expanding local manufacturing capacity.

Industry observers say Volvo's plan reflects a wider trend among global automakers to localize more of their supply chains in response to tariff risk and U.S. market demand. The Ridgeville plant’s evolution from a pure EV line to include hybrids illustrates the balancing act between electrification goals and the desire to maintain a flexible, domestically produced mix.

Overall, the shift signals Volvo's intent to shield its U.S. business from tariff-driven cost increases while pursuing growth in a market that remains a core pillar of its global strategy.