Tariffs & The Volvo EX30 – Who’s Winning Here? – CleanTechnica

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The Volvo EX30 is precisely the kind of electric car America needs. It’s a compact SUV that is agile, with good range and excellent power, at a price that many buyers will find affordable. It’s cute, peppy, and above all else, it’s a Volvo, with all that name implies about safety and excellent build quality. It is also right in the crosshairs of the new US tariffs that make importing cars made in China a virtual impossibility.

The new electric car from Volvo is supposed to have a starting price for the single motor version of $34,995, but there is some question as to whether the car will make it to America at all, now that the import duty has more than tripled. According to InsideEVs, reservation-holders who were expecting the car to go on sale in the US this summer say they have gotten little to no details about when the EX30 will arrive stateside, or what it may cost when it gets here.

Charles Anthony, who lives in Maine and is a firm believer in electric automobiles, said, “I am quite certain Volvo USA is truly in a bind over all this.” He has cancelled his reservation for a Volvo EX30, but said he does not plan to purchase one unless he gets to test drive the car first. He also fears the new tariffs on Chinese-made cars may create a harsh new reality for the Swedish automaker. “With the current market sentiment, a US election, and the bugbear of a US price for the EX30, there is no clear way to know how to price it. If the EX30 ends up north of $40,000, then it will sell as well as compliance EVs of a few years ago,” he said.

Cancelled Reservations

Other reservation holders and prospective customers in the US are also getting the jitters and wondering what’s going on with the EX30, a car many were quite excited about. Anthony said that he’s gotten little information from dealers. “All the New England dealers I contact seem to have a script to hand, which they recite to the inquirer, and poof, that is all,” he said

On the social media platform Threads, several users reported hearing nothing from their Volvo dealers after putting down their $500 deposits and getting no clear answers when they called to ask for more information. Some indicated they canceled their reservations because of the lack of communication from Volvo about the EX30. “Loved the idea of an affordable Volvo and reserved one,” one user said. “Sadly had to cancel and buy an Ioniq 6 in May. They promised the car to be delivered in summer 2024 but never heard [from] them.” Another added, “Haven’t heard a word. And most likely going to cancel my reservation and get my $500 back.”

The US representatives for Volvo are not helping the situation. All Volvo spokesperson Russell Datz will say publicly is that the company is being prudent about what could happen in the US market. He said the company is looking into how these tariffs might impact the EX30. “All I can tell you is, we’re investigating the tariffs,” he said. “When there’s a resolution, we will provide more information.”

The EX30 & Tariffs

When the Volvo EX30 was announced a year ago, the US tariff on Chinese cars was  27.5% and the company felt confident it could hit its pricing targets at that tariff  level. “Anything we have to pay to the government is accounted for in that price,” a Volvo official said when the EX30 was announced last year. Unbeknownst to many who are not international tax and tariff experts, there is a provision in US law that allows tariffs to be refunded if a company also manufactures products in the US for export to other countries. Volvo builds the XC90 in South Carolina and just started production of the EX90 battery-electric large SUV at that factory a few weeks ago. How the new tariffs affect the rules for companies who both import and export is unclear at this time. Volvo isn’t saying what the EX30 could cost here now, or how it can even sell the car at that price without losing a substantial amount of money on each one.

These new US tariffs could mean a much more expensive Volvo EX30 than originally expected, or lead to it being canceled for the US market altogether. Volvo says it will manufacture the car at its factory in Belgium next year. While that may avoid the tariff issue, it will inevitably mean higher production costs. Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, said Volvo “may need to wait until European production begins, but that will delay the EX30 by more than a year. Currently, the imported EX30 sells for around $40,000 in Europe and a locally sourced model likely won’t cut that cost, leading to a pricier version if it were to make its way to America.”

The EX30’s much-touted base price is for the single-motor, rear-wheel drive version. The all-wheel drive Twin Motor versions are expected to start at $44,900. Fiorani added that such a compact car is likely to be uncompetitive if its US price goes up too much. “If the price is significantly different from the proposed $35,000 price tag, they’re going to miss the market on that model. With the larger Tesla Model Y starting around $45,000 and eligible for the IRA incentives, the window for the Volvo is narrow. [The EX30] was more important to Volvo before growth in the EV market slowed down and the recent tariffs must have caught corporate off guard.” He added that Volvo should shift its focus from the EX30 for the American market to concentrate on the EC90. “If the bean counters have anything to say about it, the EX30 has to be dead on arrival.”

Every EX30 Recalled

A recent recall has also caught Volvo off guard. Many manufacturers have had significant software issues with their electric car models — Volkswagen and General Motors in particular — and now the EX30 has run into the same issue. According to Bloomberg, every EX30 manufactured to date has a glitch that causes the speedometer to go into test mode when the car starts. To fix the glitch, an over-the-air software update is required, Volvo said in a statement Monday. The good news is that an OTA update can fix the problem without the cars needing to visit an authorized Volvo dealer, but it comes at a bad time for the company. The EX30 has enjoyed strong sales in Europe and Volvo doesn’t want anything to slow down sales on the Continent.

Kevin Flanagan, the chairman of Volvo’s Retail Advisory Board — a group that coordinates with Volvo on the needs of US dealers — told InsideEVs that while he couldn’t offer concrete details on timing, he is optimistic Volvo will sell the car here. “They have not said that it’s not tenable. They’re giving us the indications they’re moving forward with it. I think that Volvo realizes that they need to bring this car in at a very competitive price point, and that is the communication that they have given us.”

He added that he thinks “the car will be worth the wait,” and that he expects it will succeed in bringing new customers into the Volvo brand like the company expects. “It’s an amazing car. I’ve driven it. It’s fun, it’s sporty. Great design, amazingly spacious for the class of car that it’s in. And I think that we’re going to do very well with it when it does arrive.”

The Takeaway

Flanagan may be content to give the press happy talk, but the truth is the new tariffs on Chinese-made cars may protect US automakers but they will also keep Americans from having access to more affordable EVs, something that is essential if the EV revolution is to move forward in the US. It’s a conundrum for sure, one that has no easy answer. As of this moment, there is no guarantee the Volvo EX30 will be offered for sale in the US, or if it is, that it will be priced anywhere near the $34,995 starting price US customers were promised.

It’s possible Volvo may decide to only sell the dual motor EX30 in America because it has more room in its price to absorb some of those new tariffs, but that is just a guess. From the point of view of American customers who want an affordable compact electric SUV at an affordable price, this will be disappointing news. We will have to wait to see what the impact of America’s new tariffs will be on consumers.