Volvo suffers $1.2 billion in losses due to US tariffs and production delays

 

Volvo announced on Monday that US tariffs and production delays for its latest electric car will cost it $1.2 billion.

"Due to import tariffs, the company is currently unable to sell the Volvo ES90 profitably in the United States, while ES90 margins are also under pressure in Europe for the same reason," the automaker said in a statement to investors.

In the United States, Volvo faces 25% tariffs imposed by US President Donald Trump last April.

Volvo Cars, owned by China's Geely Group, had planned to sell its ES90 luxury sedan in the United States starting next year with a starting price of around $75,000.

The company's announcement also attributes the "reduced profitability" of its large electric SUV, the ES90, to "significant launch delays and additional development costs."

This means "we have reassessed our sales volume assumptions for these two vehicles," and we will have to take a non-cash impairment charge, the company said.

A one-time non-cash impairment charge of SEK 11.4 billion (USD 1.2 billion) will be recorded in the second quarter of 2025.

Volvo produces its vehicles at several factories around the world, including in South Carolina in the United States, as well as in Sweden and China.