Volvo is exploring the possibility of sourcing electric vehicle (EV) batteries from U.S. suppliers for its EX90 SUV as the company looks to reduce production costs impacted by rising tariffs on Chinese imports.
Despite being manufactured in the U.S., the EX90 currently relies on batteries from China’s Contemporary Amperex Technology Co. Limited (CATL), a supplier to several global automakers, including Tesla and BMW.
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The EX90, Volvo’s first luxury seven-seater electric SUV, has faced price hikes, with the starting price increasing by $3,300 to $81,290 before the vehicle even reached dealerships. This adjustment was partly due to rising material costs and the introduction of a 25% tariff on Chinese EV batteries by the U.S. government.
“We’re looking to try and find if we can get a local battery manufacturer in the U.S. to help us minimize those costs,” said Volvo CEO Jim Rowan during a media call last week. “The extra tariff takes a bite out of EX90 margins.”
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Volvo’s decision to seek alternatives aligns with the broader trend of U.S. manufacturers aiming to reduce reliance on foreign-made batteries. With CATL holding a commanding 37.9% market share of the global battery industry in 2024, and competitors like China’s BYD also growing, Volvo is looking to shift its focus toward U.S.-based suppliers like SK On. SK On’s plant in Commerce, Georgia, can supply up to 300,000 EVs annually.
In addition to cost concerns, the 2025 EX90 now starts at $79,995 and can climb to nearly $90,000 for the premium Performance Ultra 6-seater model. The vehicle boasts an 111 kWh battery pack, offering a range of up to 310 miles, along with fast-charging capabilities that replenish 10% to 80% of the battery in just 30 minutes.
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As Volvo continues to evaluate its battery sourcing options, the automaker’s efforts highlight the shifting dynamics of the U.S. EV market, where local production of key components is becoming increasingly important to maintain competitive pricing.
Source: Autonews