Posted on 24 Sep 2025
Swedish carmaker Volvo Cars said Tuesday it will add a new hybrid electric model to its production lines in South Carolina, US, to improve plant capacity utilisation.
The undisclosed investment is expected before 2030 and will follow the introduction of the XC60 mid-size SUV, also available as a mild hybrid, to the plant in 2026. Currently, the factory in Charleston produces two all-electric models: Volvo’s EX90 SUV and the Polestar 3.
Volvo says the plant is operating under its design capacity of 150,000 cars per year. After a $1.3 billion investment in the plant in the last decade “to make it ready for the future,” the carmaker now wants to capitalise on its full utilisation.
“The Charleston plant is foundational to our strategic growth plan for the US,” comments Luis Rezende, Volvo Cars’ president of Americas. “By adding another model into production here, we’ll take a big step toward realising the full potential of our local manufacturing investments and workforce, and accelerate progress toward our ambitious commercial targets in the coming years.”
However, the decision to add yet another hybrid model, instead of a fully-electric, reflects the company’s demand expectations in the US market. Volvo had pledged to go all-electric by 2030, a target that was slightly tweaked to enable the sale of plug-in hybrid models in its sales mix in 2030.
Now, the carmaker announced an “increased focus on ensuring each region has the products it needs to meet customer demands.” The regionalisation strategy includes a “more focused approach” for each of its sales regions in terms of product, technology, manufacturing and commercial.
“Volvo Cars’ long-term ambition and part of our regionalisation strategy is to build where we sell,” a spokesperson tells Kallanish, when queried whether the regionalisation strategy marks a shift away from its electrification targets.
“We are committed to full electrification, with our long-term investment plan and strategy geared toward fully electric cars. However, we are pragmatic and understand that different customers and different markets will reach full electrification at different times,” she adds.
Available as both a mild-hybrid and a plug-in hybrid, the XC60 is Volvo’s most popular model in the US. During January-August, the carmaker sold over 27,000 XC60s in the country, up nearly 20% year-on-year. Around 25% of those sales were plug-in hybrids, which Volvo says offer customers “an opportunity to move to electrification if they are not yet ready or able to switch to fully electric vehicles.”
Source:Kallanish
