Volvo Car has confirmed it will proceed with plans to manufacture a new electric vehicle (EV) in the United States starting in late 2026, despite the Trump administration's reversal of tax incentives for EVs, which has created a more challenging market environment for automakers. CEO Hakan Samuelsson emphasized the company's commitment to its U.S. manufacturing strategy in a recent interview, stating that Volvo remains confident in the long-term growth prospects for both EVs and hybrid vehicles in the American market [1].
Production of Volvo's new EX60 electric sport utility vehicle began on April 22, 2026, at the company's Gothenburg, Sweden factory. The EX60 is a key component of Volvo's electrification strategy, with plans to expand its production to the U.S. market later in 2026 [1]. In response to policy uncertainty and consumer hesitancy toward full EV adoption, Samuelsson highlighted Volvo's focus on developing a '2nd-generation' hybrid vehicle, aiming to provide more flexible solutions for customers. He noted, 'We see a shift in demand, with customers looking for more flexible solutions rather than committing fully to electric' [1].
The rollback of U.S. tax incentives for EVs has led to a cautious market sentiment, prompting automakers like Volvo to re-evaluate their strategies and place greater emphasis on hybrid models. Volvo believes that offering a mix of electric and next-generation hybrid vehicles will help offset the impact of reduced tax benefits and sustain its momentum in the U.S. automotive sector [1]. Samuelsson's statements reflect a pragmatic approach, balancing innovation with market realities to navigate the current political and economic uncertainties [1].
CONCLUSION
Volvo Car is moving forward with its U.S. EV production plans despite the rollback of tax incentives under the Trump administration. By focusing on both electric and next-generation hybrid vehicles, Volvo aims to adapt to shifting market dynamics and maintain its competitive position in the American market.