Volvo Cars Reinstates Veteran CEO Amid Tariff Crisis: Urgent Shift Ahead

Hakan Samuelsson Returns to Steer Volvo Through Turbulent Times

Volvo Cars, a Swedish automaker majority owned by China’s Geely Holding Group, has made a bold move by bringing back former CEO Hakan Samuelsson to lead the company through an escalating crisis triggered by new US tariffs on imported vehicles. This leadership shakeup replaces Jim Rowan, who has helmed the company since January 2022, with Samuelsson stepping into the role on April 1, 2025, for a two year term. The decision comes as US President Donald Trump imposes a 25% duty on cars not built in the US, effective April 3, 2025, alongside looming tariffs on car parts set to hit by May 3, 2025. These measures threaten to disrupt Volvo’s global operations, spike costs, and challenge its profitability in a fiercely competitive market. Samuelsson, now 74, brings a wealth of experience from his previous tenure between 2012 and 2022, a period marked by strategic growth and innovation. With Volvo’s stock plummeting nearly 70% since its 2021 listing on the Stockholm Stock Exchange and dropping an additional 1.2% to a record low by 0844 GMT on Monday, the stakes couldn’t be higher.

The automotive industry faces unprecedented pressure from multiple fronts, as Samuelsson acknowledged in a statement, pointing to rapid technological advancements, escalating geopolitical tensions, and intensifying competition. The new US tariffs amplify these challenges, particularly for Volvo, which relies on a global manufacturing network spanning Sweden, Belgium, China, India, Malaysia, and the United States. Trump’s trade policies, including further tariff announcements slated for Wednesday under the banner of “Liberation Day,” signal a seismic shift for automakers dependent on international supply chains. Volvo’s board chair, Eric Li, praised Samuelsson’s return, highlighting his rare blend of industrial expertise, strategic vision, and proven leadership, qualities deemed essential to navigate this storm. This move follows Volvo’s warning last month that 2025 could be a tumultuous year, with potential struggles to replicate its 2024 sales and profit margins amid rising costs and market uncertainty.

How US Tariffs Threaten Volvo Cars’ Global Strategy

The US tariff hike on imported cars and parts poses a direct threat to Volvo’s business model, which balances production across continents to meet demand in key markets like the US, its second largest after China. Vehicles manufactured outside the US, such as the XC60 and XC90 built in Torslanda, Sweden, or Daqing and Chengdu, China, will face a 25% tariff when entering the US market, driving up prices for American consumers. This could erode Volvo’s competitiveness against domestic manufacturers like Tesla, which benefits from extensive US production. Even Volvo’s US assembled EX90, produced at its Ridgeville, South Carolina plant with a capacity of 150,000 vehicles annually, isn’t fully shielded. The upcoming tariff on car parts, affecting nearly 60% of components in US built vehicles according to industry estimates, will increase production costs across the board, squeezing margins on both imported and domestically assembled models.

Volvo’s ownership by Geely adds another layer of complexity, given the strained US China trade relationship. Models produced in China, including certain XC60 and XC90 variants, are particularly vulnerable, facing not only the new tariffs but also potential consumer backlash in a politically charged climate. The company’s stock market performance reflects these concerns, with shares hitting an all time low as investors grapple with the uncertainty. Samuelsson’s challenge is clear: he must steer Volvo through this tariff induced upheaval while maintaining its commitment to electrification and premium branding, all under a tight two year timeline before a long term successor takes over.

Why Hakan Samuelsson’s Leadership Matters Now

Samuelsson’s return isn’t just a nostalgic nod to Volvo’s past; it’s a calculated response to an existential threat. During his earlier tenure from 2012 to 2022, he transformed Volvo by introducing the Scalable Product Architecture (SPA) platform, which underpinned models like the XC90, and spearheaded its push into electric vehicles. His deep understanding of Volvo’s operations, honed over a decade, contrasts with Jim Rowan’s shorter stint, which focused on electrification but struggled to stabilize the company’s market position amid declining share value. Eric Li’s endorsement of Samuelsson’s “broad knowledge of our group” underscores the board’s confidence in his ability to address immediate challenges, from tariff impacts to supply chain disruptions.

Rowan’s departure after roughly three years suggests the board sought a more seasoned hand to manage this crisis, especially as Volvo prepares for a long term leadership transition. Samuelsson’s track record includes navigating complex global markets and fostering resilience, skills now critical as Volvo faces a potential $500 million annual cost increase from tariffs, according to analyst projections. His interim role positions him as a stabilizing force, tasked with laying the groundwork for Volvo’s future while tackling the immediate fallout from Trump’s trade policies.

Strategic Options to Counter Tariff Challenges

To mitigate the tariff impact, Samuelsson is likely to explore several strategic avenues, leveraging Volvo’s existing infrastructure and his past experience. One option is expanding production at the South Carolina facility, which currently builds the electric EX90. Previous statements from Rowan indicated the plant has the space and resources to accommodate additional models like the XC60 or XC90, reducing reliance on imports and dodging the 25% duty on finished cars. However, scaling up US production requires significant investment and time, potentially straining Volvo’s already pressured finances.

Another approach involves reconfiguring supply chains to source more parts from the US or countries with favorable trade agreements, such as those under the USMCA. This could lower costs for US assembled vehicles, though Volvo’s limited production in Mexico or Canada complicates this shift. Samuelsson might also consider cost cutting measures elsewhere, such as trimming marketing budgets or streamlining operations, to offset tariff driven price hikes. For imported models, passing some costs to consumers is an option, but this risks dampening demand in a market already bracing for higher prices. Volvo’s earlier hint at “increased discounts” in 2025 suggests a willingness to compete aggressively on price, a strategy Samuelsson could refine to protect market share.

Electrification remains a potential bright spot, with the US built EX90 aligning with growing demand for electric vehicles. Samuelsson could accelerate this shift, capitalizing on his past success in launching Volvo’s EV lineup, though imported electric models like the XC40 from Belgium or China would still face tariffs. Balancing these priorities, from production shifts to cost management, will define his tenure and Volvo’s ability to weather this storm.

Volvo Cars’ Market Position and Industry Comparison

Volvo isn’t alone in this tariff turmoil; European peers like Stellantis and Volkswagen also face significant exposure, lacking the US production scale of rivals like Tesla. Volvo’s South Carolina plant offers a competitive edge, but its reliance on imported models and parts limits this advantage. The broader market downturn, with Stockholm’s index falling 1.6% on Monday, amplifies Volvo’s woes, yet its 70% share drop since 2021 signals deeper investor skepticism about its resilience. Samuelsson’s task is to restore confidence while adapting to a landscape where trade barriers reshape global competition.

The company’s table of production locations highlights the tariff impact across its network:

Location	Models Produced	Tariff Impact
Ridgeville, SC, US	EX90	No tariff on finished car; parts subject to tariff
Torslanda, Sweden	XC60, XC90, V90 Cross Country	25% tariff on finished car if imported to US
Ghent, Belgium	XC40, C40, S60	25% tariff on finished car if imported to US
Daqing, Chengdu, China	XC60, XC90 (some versions)	25% tariff on finished car if imported to US

This data underscores the urgency of Samuelsson’s mission: protect Volvo’s US market presence while managing rising costs across its global operations. His two year term is a critical window to stabilize the company, setting the stage for a long term leader to build on his efforts in an industry at a crossroads.

Key Citations

• Trump announces new 25% tariff on imported cars and car parts
• Adjusting Imports of Automobiles and Automobile Parts into the United States
• Volvo Cars brings back veteran CEO to tackle tariffs, mounting industry challenges
• Volvo Cars may move some production to US over Trump tariffs
• List of Volvo Car production plants
• Where are Volvo cars manufactured
• Volvo South Carolina Factory
• Håkan Samuelsson - Wikipedia
• Trump Announces 25% Tariffs on Imported Cars and Car Parts
• Volvo Cars weighs tariffs-led production move, warns of 'hyper-competitiveness' in China
• Trump Tariffs: Stellantis, VW and Volvo Most Exposed
• Trump’s Tariffs Could Help Tesla, by Hurting Its Rivals More