Volvo pledged a 2nd gas-powered car at SC plant. 7 years later it delivered something else (2024)

When Lex Kerssemakers, then CEO of Volvo Cars for North America, visited the automaker’s Ridgeville plant in September 2017, he promised the site would start building a “next-generation” version of its popular XC90 sport-utility vehicle by 2021.

That didn’t exactly happen.

New, updated versions of the XC90 have been — and continue to be — in production since the announcement — but in Sweden, not South Carolina. Until just a few days ago, Volvo’s Lowcountry factory has focused on a single car.

“Since we started production in 2018, we have only produced the S60 sedan,” said a spokeswoman for the Volvo plant off Interstate 26 in Berkeley County.

Last week, the company added the all-electric EX90 sport-utility vehicle to its Lowcountry manufacturing lineup. And the automaker is now saying it’s actually that vehicle that Kerssemakers — flanked by a new, gas-powered XC90 — was referring to when he led a group of local and state politicians in announcing a $520 million expansion to accommodate the model at the plant, which was still under construction.

“The only change to our plans has been the name of the car,” the spokeswoman said last week, explaining why the internal combustion engine version of the XC90 was never built in South Carolina but has instead been imported into the U.S. from Europe.

“We recently updated and simplified our naming structure, so what had been the fully electric ‘next generation XC90’ is now called EX90,” she said.

The first EX90 rolled off the assembly line last week, according to Volvo. That’s three years beyond the 2021 deadline that Kerssemakers set for the plant to start building a new XC90. Those years have been filled with challenges, from the pandemic and computer chip shortages to supply chain woes and tariff wars.

There was no mention during the 2017 news conference or the accompanying written announcement of plans for a battery-powered XC90, and the term “all electric” wasn’t uttered — that came several years later as the automaker unveiled plans for an all-electric future by 2030.

Instead, Volvo touted the gas-powered XC90’s “important role” in its “sales revival in the United States and around the globe.” Volvo’s U.S. sales had fallen from a high of nearly 140,000 in 2004 to 82,724 the year before Kessemakers made his announcement. The XC90 was the automaker’s lone star, accounting for nearly 40 percent of sales that year. Americans loved the big SUV, the Volvo executive said, so the company wanted to make it closer to its biggest potential market.

The S.C. Commerce Department helped to arrange roughly $46 million in taxpayer-funded incentives for the XC90 expansion in 2017, mostly for infrastructure improvements. Berkeley County kicked in $3.5 million in additional property tax breaks.

All told, Volvo has received about $200 million in incentives for the 1,600-acre plant site next to the Camp Hall Commerce Park. That doesn’t count tax credits the company can claim based on the number of jobs it creates. Those numbers are confidential.

A Commerce spokeswoman said last week the agency always understood that what ultimately became the EX90 was the vehicle being referenced in Volvo’s announcement nearly seven years ago.

“While Volvo Cars originally anticipated that the production would commence in 2021, with the COVID pandemic, supply chain disruptions, etc., that production was understandably delayed,” she said. “The company is meeting our expectations and its commitments.”

Among those commitments is Volvo’s agreement to employ at least 3,910 workers by the end of last year, but so far it’s slightly more than halfway toward that threshold. The state agreed in December to give Volvo another four years — to the end of 2027 — to hire the number of workers legally required under the incentives agreement.

Volvo blamed a number of factors, including “economic fluctuations, geopolitical factors, tariffs, global supply chain disruptions and the COVID-19 pandemic” for its failure to hit the initial employment target. It regularly holds hiring events with SC Works — the job placement group for the state’s technical colleges — and the S.C. Department of Employment and Workforce in an effort to get the plant up to full employment.

There are high hopes for the introduction of the EX90, which will also be built in China for that market.

“We expect it to be one of our most popular vehicles, especially in the U.S., the market for which it was primarily designed,” a Volvo spokesman said, adding specific sales projections are not being shared publicly.

The Ridgeville plant, which has the capacity to build 150,000 vehicles per year, has been underutilized since the first S60 rolled off the line in August 2018.

Volvo would not disclose how many of the sedans are made each month in Ridgeville, saying “we don’t publish production numbers at all.”

But in the 70 months since production began, Volvo has sold 255,555 various S60s globally, including 67,207 in the U.S. That averages to roughly 3,651 cars per month — or less than one-third of the South Carolina plant’s capacity.

It isn’t clear how many of the S60s sold globally came from Ridgeville. Volvo also builds the sedan in China for the Chinese market, and the automaker doesn’t break out sales by country for its individual models.

To put the numbers in perspective, South Carolina’s other passenger car manufacturer — the BMW factory in Greer — says it builds more than 1,500 vehicles per day. Or enough in less than six months to fulfill all S60 sales worldwide since the summer of 2018.