Volvo Cars will develop different technologies for products offered to Chinese and Western customers as trade becomes more fragmented, said CEO Håkan Samuelsson on Monday.
“It’s our target now to have two versions of software and silicon components, the computer in the car,” he told Euronews at the EVS38 symposium in Gothenburg, Sweden.
“We need to have a Western version and a Chinese version. That’s something we just need to live with and adapt to.”
Volvo Cars has been headquartered in Gothenburg since its creation in 1927, although the firm has been majority owned by China’s Geely Holding Group since 2010.
If efforts weren’t made to tailor products to different markets, the firm’s Chinese R&D could complicate exports to the US, especially as Washington seeks to distance itself from Chinese tech.
In January, the Biden administration finalised a rule banning smart cars from China and Russia over concerns linked to potential US data leaks. Some feared that these cars could also be used by foreign states to interfere with the US electric grid or other critical infrastructure.
“We don’t see any risk … that we will be using Chinese technology in the US. That will not happen,” said Samuelsson.
A focus on China and the US
In this year’s first quarter earnings report, Volvo Cars reported a drop in profits, which it partly blamed on the “current turbulence in the broader world economy”.
New US tariffs of 25% on foreign cars and car parts are notably causing a headache for the firm, dampening consumer appetite as well as raising import costs.
In the report, Volvo Cars announced an action plan to improve profitability, “focusing on the US and China markets, as priorities”.
Samuelsson told Euronews on Monday that he wanted to change the firm’s approach to the Chinese market, tailoring it to local demands.
“We need to listen more to the local people in the region and adapt to local habits and tastes — and perhaps also have some special cars for the Chinese market,” he said.
Samuelsson pointed to the new XC70, an extended-range plug-in hybrid recently launched in China, aimed at pulling market share away from competitors like BYD.
Volvo Cars’ retail sales decreased by 12% year-on-year in China in the first quarter, with electric vehicles and plug-in hybrids accounting for 10% of this total.
In the US, Volvo Cars’ sales jumped by 8% — potentially linked to tariff frontloading — with electric vehicles and plug-in hybrids making up 28% of that total.
Tech restrictions in Europe
Although the firm has signalled a desire to focus more on US and Chinese customers, Volvo Cars still relies heavily on the European market. The region represented nearly half of its total sales for 2024, as well as the same proportion of sales in Q1 2025.
When it comes to manufacturing these vehicles, some are made on Belgian and Swedish sites, while others are made in China and shipped to Europe.
This means that — on certain vehicles — Volvo is exposed to EU duties, introduced last year in response to alleged unfair subsidies from Beijing.
“Tariffs are not going to help the European industry to be more competitive long-term,” said Samuelsson.
“We should have an attitude of free trade and free competition…but realistically that will not happen. I think we’re going into a more regional world.”
A recent action plan published by the European Commission suggested that Chinese carmakers operating in the EU may be obliged to enter joint ventures with European companies or license parts of their technology.
Asked how Volvo Cars would be affected given its ties with Geely, Samuelsson suggested the firm would be untouched, underlining that a significant amount of development is still happening in Europe.
“I don’t see any problems with the Chinese technology in our cars in this respect…the software products in the car are to a large extent adapted and developed by Volvo,” he said.
