Why Is Volvo Considering Building the XC60 and XC90 in South Carolina?
Volvo’s South Carolina plant, nestled in Ridgeville, was once a beacon of optimism for the brand’s American ambitions. But lately? It’s been running at a crawl. The factory, designed to churn out up to 150,000 vehicles a year, is currently operating at just 13% of its capacity. Most of that output comes from the EX90 and the Polestar 3—models that, frankly, aren’t flying off dealer lots. In the first half of this year, only 1,972 EX90s found homes in the U.S. Compare that to the 3,004 XC90s and 2,421 XC60s sold in a single month, and the contrast is stark.
So, what’s driving Volvo to rethink its production strategy? Two words: demand and tariffs. The XC60 and XC90 are Volvo’s bread and butter in the U.S., accounting for nearly 63% of all Volvo sales stateside last year. With global trade tensions and tariffs making imports from China and Europe more expensive, building these best-sellers in America could be a game-changer for Volvo’s bottom line.
How Would Local Production Impact Volvo’s U.S. Sales and Dealers?
Let’s be honest—dealers are hungry for more XC60s and XC90s. These SUVs have proven themselves as family favorites, with their blend of Scandinavian style, safety tech, and everyday practicality. Last year alone, Americans snapped up 39,492 XC90s and 38,892 XC60s. That’s not just good—it’s essential for Volvo’s survival in a fiercely competitive market.
If Volvo moves forward with plans to start building the XC60 in January 2027 and the XC90 by October 2028, the impact could be immediate. Local production means faster delivery times, more flexibility in responding to market trends, and—crucially—lower prices for consumers. It also gives dealers a stronger hand, with inventory tailored to American tastes and less vulnerability to overseas supply chain hiccups.
What’s the Bigger Picture for Volvo’s U.S. Manufacturing Strategy?
Volvo’s not just thinking about SUVs. The company is reportedly eyeing the possibility of building the ES90, a stylish electric sedan currently made in China, at the South Carolina plant. Why? Tariffs have made it tough to sell the ES90 profitably in the U.S. Shifting production stateside could open the door to new customers and help Volvo compete with rivals like BMW and Mercedes, who already build many of their U.S.-bound vehicles locally.
This isn’t just about numbers—it’s about resilience. By building where they sell, Volvo can insulate itself from the unpredictable winds of global trade policy. It’s a strategy echoed by other automakers facing similar pressures, and it’s one that industry analysts say is likely to become the new normal as the world’s economic landscape shifts.
What Are the Challenges and Opportunities Ahead?
Of course, it’s not all smooth sailing. Ramping up production of two high-volume models will require significant investment in workforce training, supply chain adjustments, and possibly even plant expansion. There’s also the question of how quickly Volvo can pivot if consumer preferences shift—say, if the market suddenly swings even more decisively toward electric vehicles.
But the opportunities are hard to ignore. If the Ridgeville plant can hit its targets—building up to 60,000 XC60s and 50,000 XC90s annually—it would transform the facility from an underused asset into a powerhouse of Volvo’s North American operations. It could also create hundreds of new jobs and inject fresh energy into the local economy.
What Does This Mean for Volvo Owners and Shoppers?
For current and prospective Volvo owners, this shift could mean better availability, more competitive pricing, and potentially even U.S.-specific features or trims. There’s also a certain peace of mind that comes with knowing your vehicle was built closer to home, with all the benefits that brings in terms of service, parts, and support.
And for those watching the broader industry, Volvo’s move is a clear signal: the days of relying solely on overseas factories are fading. Automakers are recognizing that local production isn’t just a nice-to-have—it’s a must in a world where tariffs, logistics, and consumer expectations are all in flux.
The big takeaway? Volvo’s push to build its best-sellers in America isn’t about perfection—it’s about smarter adjustments. Start with one change this week, and you’ll likely spot the difference by month’s end.