President Donald Trump has long proclaimed that their new tariffs will encourage car manufacturers to build more of their vehicles in the United States. While some brands have indeed strengthened their commitments in the local market, Volvo has gone ahead and unexpectedly announced it will actually cut 5% of the workforce at its factory in Charleston, South Carolina.

The Swedish brand confirmed that these cuts do not form part of the redundancies it announced during the release of its first-quarter earnings last week. In total, the Charleston cuts will impact roughly 125 of the 2,500 employees who work there. It did not say who will lose their jobs or if the firings will impact production.

Read: Trump’s Tariffs Drive Volvo To Build A New Model In The US

Volvo’s South Carolina plant has the capacity to build 150,000 vehicles annually. However, it currently only builds the electric EX90 and the Polestar 3 there. It blamed the new job cuts on ever-changing trade policies, tariffs, and changing market conditions.

Despite slashing over 100 jobs, Volvo told Reuters that the US remains an important part of its long-term strategy and it’s still committed to boosting local output in the future. It also said it intends to eventually create 4,000 new jobs in South Carolina, but did not specify when these new jobs could be created.

It seems likely that Volvo is looking to slash any unnecessary expenses while global economies begin to adjust to America’s move away from globalization. As recently as last week, Volvo chief executive Hakan Samuelsson said the brand is already thinking about building an additional model in the US. While he did not specify which model this will be, the XC60 and XC90 are the most likely options.

Trump’s tariffs have also forced Volvo to rethink its local sales strategy. It will reportedly stop selling the S90 sedan in America from next year because it’s imported from China. This will allow Volvo to focus on models including the XC40, XC60, and XC90.

Last September, Volvo rowed back from its previous pledge to go all-electric by 2030, and now, eight months later, that looks like a very smart move. The Geely-owned automaker just announced its latest sales figures, and they show registrations of fully electric Volvo vehicles fell by almost one-third.

Volvo’s EV sales fell 32 percent in April versus the same period last year. The company sold 17,090 EVs in April 2024, compared to the 11,697 EVs sold in the month just gone. PHEV sales actually grew fractionally (by 2 percent) to 14,688, but MHEV and ICE registrations also dropped 5 percent to 34,315.

Related: Trump’s Tariffs Drive Volvo To Build A New Model In The US

That means Volvo’s combined electric sales were down 16 percent, and total sales for all power types for April stood at 65,838, or 11 percent lower than they were for the corresponding period last year. And April’s terrible performance really dragged down the overall Q1 EV sales figures, which showed a 6 percent sales decline and are down 7 percent Jan-April.

The lacklustre demand for EVs comes despite the EX30 being rolled out to the US and sales of the big EX90 also now having begun. But Volvo is one of the automakers affected by President Trump’s tariffs, albeit not as badly affected as Audi or Porsche. Although it does build the EX90 at its South Carolina plant in the US, other models like the XC90, XC60, XC40, and EX30 are all made overseas and subject to import levies.

Volvo sales April 2025

Volvo is looking to address that issue and is planning to build a second model – probably the XC60 or XC90 – at the same site. Volvo recently dropped the S90 from the US market due to tariffs, though the newly facelifted sedan will still be offered in Asia.

The man tasked with managing the turnaround is Hakan Samuelsson, who returned to the CEO role on April 1 on a two-year contract while the company looks for a permanent new boss. He replaces Jim Rowan, who took over from Samulesson in 2022 but was shown the door this spring after three years in the big chair.