Volvo Cars said Tuesday it would expand an existing factory in South Carolina to produce a hybrid vehicle by the end of the decade, as the Swedish carmaker seeks to cater to American tastes and avoid tariffs.
Volvo and its sister company, Polestar, currently produce two electric vehicles at the plant, in Ridgeville, near Charleston. Volvo had previously announced plans to begin producing a third vehicle at the factory next year, a midsize sport utility vehicle available in hybrid and electric versions.
The fourth vehicle announced Tuesday will be a newly designed hybrid, reflecting the popularity of that technology in the United States. The car is part of the company’s plans to increase sales in the United States 60 percent in the next five years, from about 125,000 vehicles last year. Volvo has not yet shown a prototype of the car or disclosed further details.
Hybrids have gasoline engines augmented by batteries and electric motors, offering better fuel economy and lower emissions than conventional cars. They can also run on gasoline alone, so owners do not need to worry about being able to find a place to charge.
“Electrification has not picked up as fast as we thought a few years ago,” Hakan Samuelsson, the chief executive of Volvo Cars, said in an interview. “We think we need hybrid cars longer.”
But he said he remained convinced that the popularity of electric vehicles would grow, especially after Volvo and others begin selling models that are closer in price to conventional cars and can travel as far on a charge as on a tank of gas.
“Coming next year, we will take a huge step in offering longer range and also affordable prices,” Mr. Samuelsson said. “If you address those two things, there are no reasons why a customer would not go electric.”
President Trump’s tariffs also played a role in Volvo’s decision to expand the factory, he said. Cars imported from Sweden and other European Union countries will be subject to a 15 percent levy, down from 27.5 percent, under an agreement with the United States announced in August. But the two sides still need to work out details.
“The tariffs have accelerated this process, it would be fair to admit that,” Mr. Samuelsson said. “But it’s not only the tariffs.”
While using tariffs to pressure foreign carmakers to produce in the United States, the Trump administration raised questions this month about how welcome the companies are. Federal immigration agents raided a factory in Georgia this month owned by South Korean carmaker Hyundai and LG Energy Solution, a battery supplier. Almost 500 people, mostly South Koreans, were detained and later deported.
Luis Rezende, a Brazilian who oversees Volvo’s operations in North and South America, said he was not worried about the same thing happening in Charleston. “We are very compliant,” he said.
Volvo is based in Gothenburg, Sweden, and strives to maintain a Swedish identity. But it is majority owned by the Chinese automaker Geely, indirectly giving China a foothold in the U.S. car market. Cars made in China are effectively frozen out of the United States by 100 percent tariffs.
Volvo’s majority shareholder has not been an issue with U.S. authorities, Mr. Samuelsson said. “We are as Swedish as meatballs,” he said.
Jack Ewing covers the auto industry for The Times, with an emphasis on electric vehicles.
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