New Volvo Hybrid Is A Big Bet on U.S. Manufacturing to Boost Market Share

Volvo is struggling to convince American buyers that it’s a brand worth having, and this issue predates the tariffs. Now, the Swedish automaker has its back against the wall and is looking for ways to stay alive. The answer: a new Volvo hybrid, and more.

The company announced major expansions at its South Carolina plant, alongside plans to roll out new hybrid models built in the U.S., a turn in its global strategy. If you don’t recall, the company had promised to be at the forefront of EVs in 2023, as this article explains.

So, a hybrid not only signifies that the company is aiming for the U.S. (where people don’t love EVs) but that, as a global strategy, it’s also a step back from their original goals. Will it be enough? Volvo sure hopes so. 

South Carolina at the Center of Volvo’s Future

Volvo’s Ridgeville, South Carolina, facility has been a cornerstone of its U.S. operations since it opened in 2018. Initially dedicated to the S60 sedan, the plant has since pivoted toward SUVs, including the flagship EX90 electric SUV. Now, it will produce the new Volvo hybrid.

This is a crucial move for the company, as it has only produced 5% of the vehicles sold in the U.S. domestically up until now. With such low production, their cars will become too expensive.  One of its more popular vehicles in the U.S., the XC90, was produced overseas.

That’s why Volvo is scaling up again, preparing to produce more vehicles domestically to better serve U.S. buyers.

These operations are challenging due to the massive initial investment required. It’s a gamble as big as saying, back in 2023, they were to go all-electric. 

However, there are high hopes. According to company executives, South Carolina will serve as the anchor of Volvo’s North American strategy. 

The plant is being positioned not just as an assembly line, but as a hub for advanced production, capable of building hybrid, electric, and gasoline-powered vehicles for the U.S. market and beyond.

A New Volvo Hybrid for America

Part of this expansion includes a new Volvo hybrid model designed specifically for American drivers. As USA Today reported, the as-yet-unnamed vehicle will combine Volvo’s safety-first DNA with the flexibility of hybrid power, appealing to buyers not yet ready to go fully electric.

This reflects a broader industry trend. As EV adoption grows, hybrids are gaining traction as a practical middle ground, particularly in regions where charging infrastructure is limited. 

By investing in U.S.-built hybrids, Volvo is hedging its bets and ensuring relevance across a broader customer base.

The Goal: More Market Share

While the brand enjoys strong recognition for safety and design, it trails luxury rivals like BMW, Mercedes-Benz, and Lexus in American sales. When was the last time you spoke to a Volvo owner? 

Building more vehicles locally can help reduce costs, avoid tariffs, and shorten supply chains. These steps are small efforts in the right direction. 

Executives have also emphasized that U.S. production will give the brand greater flexibility in responding to shifts in consumer demand. With SUVs dominating sales charts and hybrids expected to see a strong decade, Volvo wants to position itself as a serious contender in both categories. 

At the same time, being a strong contender also requires them to have the versatility of pivoting when necessary. 

Why It Matters

Volvo’s push comes at a critical moment. The U.S. market is in chaos, with confusion surrounding the future of EVs, rising costs, and a stagnant and indecisive consumer base.

For a mid-size luxury brand like Volvo, increasing local production isn’t just about efficiency—it’s about survival.

Ramping up in South Carolina also signals confidence in the U.S. economy and commitment to American jobs. At full capacity, the plant could employ thousands, providing a boost to local communities while reinforcing Volvo’s identity as more than an import brand.

The strategy carries risks. Hybrids may only serve as a stopgap if the industry pushes towards EVs. However, that’s a big “if.” Who knows what will happen in four more years? 

Meanwhile, Volvo must compete not only with European rivals but also with Japanese brands like Toyota, which dominate the hybrid market. Still, the decision to scale up U.S. production shows Volvo isn’t shying away from the fight.