Volvo to Cut 5% of Workforce at South Carolina Plant Amid Tariff Pressures
Date: 08-may-2025 | By: Nuztrend Team
Volvo Cars has confirmed it will reduce its workforce by 5% at its Charleston, South Carolina manufacturing plant, marking a strategic response to economic headwinds and evolving international trade policies. The decision affects roughly 125 employees at the automaker’s only U.S. production facility.
The company cited tariff-related uncertainties and broader macroeconomic pressures as primary reasons for the job cuts. "While this decision was not made lightly, it reflects the current market conditions and our ongoing commitment to long-term operational sustainability," a Volvo spokesperson stated.
EV Ambitions Hit Production Challenges
The Charleston plant is responsible for producing Volvo’s flagship electric SUV, the EX90, as well as the Polestar 3 through its affiliated brand. Despite being designed to manufacture up to 150,000 vehicles annually, the plant has experienced lower-than-expected output. As of early May 2025, only 1,316 EX90 units had been sold in the U.S.
These figures reflect broader challenges facing the electric vehicle market, including supply chain disruptions, rising material costs, and slower-than-projected consumer adoption in certain segments.
Strategic Realignment, Not Retrenchment
- Layoffs affect approximately 125 out of 2,500 employees at the South Carolina plant.
- Volvo is still committed to long-term U.S. expansion, including a goal of 4,000 local jobs.
- The company aims to streamline operations without compromising future growth plans.
- The cuts are not directly tied to Volvo’s broader cost-cutting program announced in Q1 2025.
Earlier this year, Volvo disclosed plans to reduce expenses by 18 billion Swedish crowns ($1.88 billion), part of a global effort to enhance profitability amid shifting industry dynamics. However, the Charleston plant layoffs are being treated separately from that initiative.
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Future Outlook Remains Focused on Electrification
Despite the setback, Volvo reaffirmed its dedication to the U.S. market and to its electrification roadmap. The automaker is investing heavily in its American lineup and EV infrastructure to remain competitive as the industry transitions away from combustion engines.
“We are adjusting for today, but building for tomorrow,” the spokesperson emphasized. “Our Charleston facility remains a cornerstone of our North American strategy.”
The move also highlights the ongoing impact of trade policy uncertainty on global automakers operating in the U.S., especially as they navigate complex tariff structures, geopolitical tensions, and shifting consumer expectations.
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