Here’s how Volvo plans to overcome Trump’s tariffs with new EVs arriving

Volvo is launching a nearly $2 billion (SEK 18 billion) restructuring plan to drive growth and mitigate the impact of Trump’s tariffs. With the new EX30 and ES90 EVs rolling out, Volvo is taking drastic action to drive growth.

Volvo launches restructuring plan due to Trump’s tariffs

After its operating income fell by nearly 60% to SEK 1.9 billion in the first quarter, Volvo launched a cost and cash action plan.

The restructuring is worth SEK 18 billion, with most of it being realized in 2026. Volvo’s new strategy includes SEK 3 billion in variable cost actions and SEK 5 billion in indirect spend efficiencies. The additional SEK 10 billion will be added in cash actions to reduce working capital and capital expenditures this year and in 2026.

Volvo Cars CEO Håkan Samuelsson said, “The automotive industry is in the middle of a very difficult period with challenges not seen before.”

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With “turbulence in the market,” Samuelsson added that the company needs to “further improve our cash flow generation and lower our costs.”

To do so, Volvo is focusing on three areas: profitability, electrification, and regionalisation. Volvo is already leading the premium segment, with electrified vehicles accounting for 43% of sales in Q1. However, with new EVs launching, Volvo said more will need to be done to overcome the impact of Trump’s tariffs.

Volvo created a new region called Americas, which includes the US, Canada, and Latin America, to streamline its global operations.

In the US, the company is looking to sharpen its product line-up and plans to boost production at its Charleston, South Carolina, plant.

Earlier this month, Volvo started production of the EX30 at its Ghent plant, which will help it ramp up deliveries in the second half of 2025.

Since it will be imported into the US, Volvo is bracing to take a hit from tariffs. Even the EX90, which is made in Charleston, is heavily impacted, as most components still come from Europe.

Volvo also revealed the new ES90 last month, its new electric sedan and second EV built on the Volvo Cars Superset Tech Stack. It’s Volvo’s sixth fully electric vehicle following the EX90, EM90, EX40, EX40, and EX30.

In China, Volvo plans to adapt to the changing market with its first extended-range PHEV model, which will launch later this year.

Volvo said it remains “firm on becoming a fully electric car company.” Despite a weaker overall market, almost a fifth of the vehicles it sold in the first quarter were electric.