The high -end Volvo is no longer succeeding, and it is not completely of its fault

The American market is probably the most important for Volvo with China, but there is an obstacle on the road to the Swedish brand which is called Donald Trump. The American president has indeed voted murdered customs duties for cars produced in China and sold on American soil. They are rare, but unfortunately for Volvo, the high -end electric “90” is one of them. And this contributes to Volvo’s difficulty in selling its new models, while the current XC90, restyled once again in 2024, sells better than a ex90, however fresh. Volvo therefore reacted to this complicated period for the high -end.

ES90 will be less profitable than expected

Volvo is quite transparent in its press release since the manufacturer says that the large ES90 sedan will have a stronger profitability than expected “despite a major evolution of software and upward production planning”. Producing ES90 is good, selling them is better. And with 247.5 % additional customs duties, it is almost impossible for Volvo to sell its high -end product in China well, with the partner Geely. A situation also similar in Europe since cars made in China are also surcharged, to a lesser extent. Result: Volvo has planned an “exceptional depreciation excluding cash” in the amount of one billion euros.

“Given the evolution of the market, such as customs duties in the United States, the development and launch delays of the ES90 and the prioritization of strategic investments, we have reassessed our volume forecasts for these two vehicles. This results in profitability on the life cycle below the forecasts, ”announces the CEO of Volvo.

Over the first six months of the year, just over 3000 Volvo XC90 were sold against only 1900 ex90. For the ex90, customs duties do not play since it is indeed produced on site, in the Volvo factory in Charlestone. But remember that electricity represents only a little less than 10 % of new vehicle registrations in the United States, a significantly lower rate in Europe and especially in China.

Volvo should not miss the ex60

In difficulty on the high -end against the Chinese, German or Japanese, Volvo must therefore succeed in the launch of the next ex60, which will be offered to customers next year. We are already sure that it will be produced in Europe (Sweden, or Eastern Europe alongside the Polestar 7) But nothing indicates for the moment that it will also be made in North America where the current XC60 has great popularity. And since customs duties also affect vehicles sold in America and products in Europe, Volvo will probably have to play it fine to maintain its best seller worldwide.