Volvo blames China for forecast growth cut

VOLVO CARS has lowered its full-year retail sales forecast citing the impact of European tariffs on Chinese-made electric cars.

The company has been caught in the crossfire of the action which affects not only Volvo owners Geely, but the company directly with several Volvo electric models now made in China.

Rising trade barriers between China and the EU have slowed the sales success of Volvo’s EX30 small SUV (pictured), which is Europe’s third best-selling electric vehicle behind the Tesla Model Y and Model 3.

Last month, Volvo said it would also postpone US shipments of the EX30 after Washington imposed a duty of more than 100 per cent on Chinese-made EV imports.

In a move expected to circumvent both US and EU tariffs, Volvo will start producing the EX30 at its Belgian plant from the first half of 2025. It began production of the large EX90 electric SUV in the United States last month, with initially customer deliveries slated for the third quarter of this year (2024).

Like others, Volvo has lowered its forecast for EV sales growth. This week, the Sino-Swedish manufacturer lowered its forecast for sales growth to 12 per cent (down three per cent) for the 2024 calendar year.

In the second quarter of 2024, Volvo produced 211,900 electric vehicles – more cars than it has buyers for.

“We wanted to put a floor on that for the markets to say we are still going to grow, but there are some headwinds – it is really driven by tariffs,” said Volvo chief executive officer Jim Rowan.