Volvo Cars has briefly suspended operations at its Ridgeville, South Carolina, plant following a shortage of key components, disrupting the production of its flagship EX90 electric vehicle.
While the pause began on Thursday, operations resumed by Saturday after the issue was resolved.
The EX90, assembled in the U.S., relies heavily on an international supply network.
According to Volvo, 20–25 percent of its parts are sourced from the U.S. or Canada, 30 percent from Mexico, and another 30 percent from China, with the transmission manufactured in Sweden. The interruption has drawn attention to the vulnerability of global supply chains, especially as trade tensions and new tariffs continue to impact the automotive industry.
The company noted that the parts shortage was the direct cause of the temporary halt. "The shutdown was caused by a lack of certain components," Volvo confirmed.
Trade policy changes have added further strain to operations.
The U.S. administration under President Donald Trump imposed a 30 percent tariff on Chinese imports and a 25 percent duty on foreign auto parts. These increased costs and regulatory hurdles have complicated logistics and inflated production expenses for automakers like Volvo.
In light of the supply disruption, Volvo laid off about 125 workers at the South Carolina plant—roughly 5 percent of the local workforce. The layoffs are part of a wider global cost-cutting initiative, with the company aiming to eliminate 3,000 positions, mostly in Sweden. The restructuring plan is expected to save the company around $2 billion (approximately ₹16,000 crore).
The U.S. remains a key market for Volvo, accounting for 16 percent of its global sales, second only to China, which holds a 20 percent share. However, the company could face new obstacles in the near future, as there is speculation about a potential U.S. ban by 2027 on automakers owned by Chinese firms—a move that may affect Volvo’s long-term presence in the country.