Volvo Responds to Tariffs with Mass Layoffs & EX30 Price Bump

Another victim of tariffs

As tariffs continue to cause uncertainty in the automotive industry, Volvo is cutting jobs and raising prices. Though tariffs have yet to be implemented by the United States government, Volvo is being proactive. Like many automakers, the automaker is taking steps to navigate an uncertain future, both in the short and long term.

Volvo plans to cut approximately 3,000 jobs as part of its “cost and cash action plan,” which, in part, aims to eliminate redundancies across the company. The automaker says it will eliminate approximately 1,000 consultants across its organization, 1,200 roles at offices in Sweden, and roughly 800 positions in its remaining global markets. The cuts represent about 15 percent of Volvo’s total global workforce.

The EX30 now costs more – a lot more

When Volvo announced the EX30, it boldly claimed that the small SUV would arrive for $34,950—an incredible price point for any electric vehicle. Since that announcement, the U.S. government has imposed tariffs on electric vehicles (EVs) made in China, prompting Volvo to avoid importing EX30s built in China to the United States. To avoid tariff charges, Volvo ramped up production in Belgium. Now, a looming 50 percent tariff on European autos has caused Volvo to raise a white flag.

Volvo CEO Hakan Samuelsson said on Friday that selling the automaker’s Belgium-made EX30 stateside for the original $34,950 price tag would be “almost impossible” at this point. Thanks to tariffs, Volvo has raised the starting price of the EX30 to $46,195, as first reported by Reuters.

The $46,195 price point seems curious because it’s not a round number, but it appears to be grounded in logic. That new price represents a roughly 32 percent increase. Initially, the Trump administration proposed a 25 percent tariff on European goods, which has since been bandied as 50 percent. A 32 percent price increase appears to be Volvo hedging a bet that a 25 percent tariff is more likely than a 50 percent tariff, and that it will protect its profit margin if the tariffs are implemented.

Most Volvo cars sold in the United States are imported from Europe. Samuelson, hopeful the EU and the U.S. can find common ground on trade, said, “I believe there will be a deal soon. It could not be in the interest of Europe or the U.S. to shut down trade between them.”

Tariffs scare more than Volvo

Tariffs are rattling several European automakers, not just Volvo. BMW recently halted its EV efforts in the United States, VW put a freeze on pricing to ease consumer fears, Nissan is drastically cutting back on production, Hyundai is cautioning dealerships about potential price increases, and Jaguar Land Rover has halted shipments of vehicles into the United States.

Even the threat of tariffs has automakers on high alert. The industry is built on the back of a global supply chain, and creating a fully U.S.-based manufacturing and supply chain to avoid tariffs is likely impractical and impossible.

Final thoughts

Automakers are worried, but consumers are the ones paying the price—literally. Volvo has a large factory in Charleston, South Carolina, and says it’ll ramp up production there. However, the plant doesn’t currently manufacture fully electric vehicles, so we can expect to see more hybrids available on Volvo lots soon. Tariffs also interrupt the push toward full electrification.