Volvo's American Operations About To Undergo A Big Change

Electric Vehicles / Comments

Will its gamble pay off?

Big changes are currently underway at Volvo. Last month, it announced its goal of having a completely climate-neutral global manufacturing operation in place by 2025 and is aiming for an all-electric global lineup by 2030. Presently, the Volvo XC40 Recharge and soon to arrive C40 are the only two pure battery electrics but this will soon change.

Both the XC60 and XC90 SUVs will adopt full battery electrification once the next-gen models arrive. Sedans and wagons like the S60 and V90 won't be far behind. And speaking of the S60, the US-based factory where it's built will become Volvo's first all-electric vehicle assembly plant, according to a report from Automotive News.

Located about an hour from Charleston, South Carolina, the Ridgeville facility will soon become the "first company factory in the world building our all-new-generation all-electric cars - before Europe and China," said Volvo CEO Hakan Samuelsson.

Volvo
Volvo
Volvo

Around $700 million is being invested there for the necessary preparations. What's interesting is that the factory only began operations in 2018 and is capable of producing 150,000 vehicles annually. At present, only around 26,000 Volvo S60s are rolling off the line partially due to the pandemic. Later next year, however, the plant will begin building two new EV crossovers aimed directly at the likes of the Porsche Cayenne. One of those vehicles will be a Polestar.

Following this, a BEV version of the next XC90 will enter series production. The next XC60 isn't due until 2024 and it may also be made in Ridgeville. All of these news EVs will ride on the automaker's new Scalable Platform Architecture.

Volvo
Volvo
Volvo
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Volvo is fully aware Americans are not as anxious to buy EVs as their European and Chinese counterparts, but Samuelsson is betting luxury buyers will make the change before the mainstream.

Unlike BMW and Mercedes-Benz, which build SUVs in South Carolina and Alabama, respectively, Volvo's US operations are solely for America. Nothing will be exported outside of North America. This "build where you sell" decision will help protect Volvo from things like tariffs, such as the 27.5 percent tax slapped on Chinese-built vehicles. Access to local suppliers also makes the process easier and there are some environmental considerations as well. The biggest risk Volvo faces is an economic downturn in the US where demand for luxury vehicles drops.

2019-2021 Volvo S60 Hybrid Front Angle View CarBuzz
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2019-2021 Volvo S60 Hybrid Central Console Volvo
Source Credits: Automotive News

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