FYI: Volvo is actively seeking an American battery supplier to mitigate costs amid high tariffs on Chinese-manufactured components for its EX90 electric SUV.
Volvo is attempting to overcome a significant challenge in the production of its all-new electric SUV, the EX90. As the vehicle is manufactured in South Carolina, its pivotal battery systems are sourced from China’s Contemporary Amperex Technology Co. Limited (CATL). However, rising tariffs on Chinese imports have forced Volvo to rethink its strategy and significantly push up the EX90’s starting price by $3,300, setting the new base at $81,290, including destination fees.
Seeking American Solutions to Cost Challenges
The tariff increase on Chinese-made batteries has become a considerable hurdle for Volvo, leading the automaker to search for a local battery supplier in the United States. This move could potentially bring down costs and help reduce the EX90’s final price tag. Volvo Cars CEO Jim Rowan emphasized this priority, stating that establishing a U.S. battery partnership is a "key ongoing project."
Two potential partners are emerging in this pursuit. South Korea’s SK On, operating a plant in Commerce, Georgia, and Japan’s AESC, with upcoming facilities in Kentucky and Florence, South Carolina, are both top candidates. Each geographical location offers logistical advantages due to their proximity to Volvo’s U.S. manufacturing site.
Specifications and Capabilities of the EX90
While dealing with supply chain and tariff issues, Volvo aims to impress with the EX90’s technical specs. Built on the SPA2 platform, also used for the Polestar 3, the EX90 offers two powertrains, each utilizing dual-motor all-wheel-drive configurations. Its base Twin Motor version delivers 402 horsepower, achieving a 0-60 mph dash in 5.7 seconds. The more robust Twin Motor Performance variant outputs 496 hp, slicing the 0-60 time down to a brisk 4.7 seconds.
A single battery option is available, offering a 111 kWh total capacity (107 kWh usable), achieving an EPA-rated range between 300-310 miles, depending on configurations. However, it’s noteworthy that while cash buyers won’t benefit from the $7,500 federal tax credit, leasing the EX90 could open this opportunity.
A Strategic Pivot in the Luxury EV Market
In response to global economic conditions and market pressures, Volvo’s drive to partner with a domestic battery supplier demonstrates a strategic pivot in the luxury electric vehicle segment. This could lead not just to reduced production costs, but also to more competitive pricing, significantly influencing the luxury electric SUV market in the United States.
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By William Kouch, Editor of Automotive.fyi
