Elon Musk isn’t the only auto boss who thinks EV subsidies are a bad idea.
Jim Rowan, the CEO of Swedish auto giant Volvo Cars, told Business Insider that he disagrees with the idea that governments should subsidize the EV industry, as President Donald Trump unravels federal support for electric vehicles in the US.
“I don’t subscribe to the fact that government should give incentives for people to buy EVs,” Rowan said in an interview after Volvo released its 2024 results on Thursday.
“I think governments have got enough to spend money on, in terms of healthcare and education, that they shouldn’t need to subsidize industries.”
“I would like to see them do more about infrastructure to encourage people to buy EVs, or tax incentives, but I’m not a proponent of actual subsidies themselves,” Rowan added.
His comments come after Trump signed a series of executive orders signaling his intent to scrap EV subsidy programs and emissions targets in his first weeks in office, with reports suggesting the new administration is planning to ditch the $7,500 tax credit for new electric vehicles in the US.
Auto industry experts have warned that cutting the tax credit could make electric vehicles unaffordable for many Americans, but that hasn’t stopped Tesla boss — and Trump ally — Elon Musk from expressing support for its demise.
“End all government subsidies, including those for EVs, oil and gas,” he wrote in a post on X last year.
Musk has said that ending the incentive would “devastate” Tesla’s competitors but help the company in the long run, despite the fact that many of Tesla’s vehicles benefit from the $7,500 credit. Tesla began advertising the Cybertruck with the tax credit this week.
The withdrawal of US government support for EVs adds to the storm clouds facing automakers this year, with the trade war sparked by Trump in the last month threatening to severely disrupt the industry.
Speaking in an earnings call after Volvo Cars released its Q4 results, Rowan warned that the industry would be “severely tested” in a “challenging” 2025.
The Swedish automaker, which last year abandoned plans to sell only EVs by 2030, saw operating income and margins decline in the latest quarter, with shares falling as much as 10% on Thursday.
Rowan told BI that Volvo may have to reconsider the economics of producing future vehicles in Europe if Trump follows through on his threat of imposing tariffs on the European Union. He warned that trade levies on the EU could raise car prices in the US.
“Ultimately it might make it more expensive for the end customer,” said Rowan, adding that depending on the level of tariffs automakers may choose to pass the cost onto consumers rather than shifting production.
“If you’re going to move production that’s expensive… (if the tariffs are) below a certain amount, it doesn’t make sense. You’ve just got to eat those tariffs or try and pass them on to the customer,” Rowan said.
Volvo, which is owned by Chinese conglomerate Geely, has already faced tariff headaches over its EX30 electric SUV.
With a starting price of around 38,000 euros ($39,600), the EX30 has proven popular in Europe, but the EV’s debut in the US was delayed as a result of the 100% tariffs on Chinese-built electric vehicles introduced by the Biden administration last year.
Some EX30 trims are now available in the US at a $44,900 starting price, and Volvo is set to start producing the EV at its Belgium factory in the first half of this year, but Rowan said the uncertainty around tariffs was making an already-difficult outlook for the auto industry more complicated.
“When you have a changing landscape of tariffs, it just makes it more complex and costly to navigate through,” he said.
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