Volvo Brings Back Former CEO Håkan Samuelsson as Tariffs and EV Setbacks Trigger Strategic Shift
Volvo’s Leadership Reset Signals Strategic Recalibration Amid Tariff Turmoil and EV Uncertainty
As Geopolitical Tensions, Tariffs, and EV Headwinds Weigh Heavily, Volvo Bets on the Return of a Proven Steady Hand
The timing could hardly be more precarious.
On the eve of sweeping 25% U.S. tariffs on imported vehicles, and with its shares languishing near record lows, Volvo Cars has made a dramatic move: reinstating former CEO Håkan Samuelsson to the helm for a two-year term beginning April 1, 2025. This comes after the resignation of Jim Rowan, who exits amid growing investor anxiety over profitability, uncertain electric vehicle (EV) strategies, and a fraught geopolitical landscape.
The decision to bring Samuelsson back is more than a nod to nostalgia. It is a calculated maneuver, aimed at signaling to markets, regulators, and rivals that Volvo intends to steady the ship with familiar hands—and industrial muscle.
“In a climate like this, there’s often a return to what’s proven,” said one auto analyst who covers Nordic manufacturers. “Volvo isn’t just pivoting leaders—they’re rewriting the execution plan.”
Under Fire: A Perfect Storm of Tariffs, Falling Margins, and EV Drag
Volvo Cars enters April 2025 facing not only punitive U.S. tariffs but a broader recalibration of its electrification agenda. The automaker's flagship EX30, a cornerstone of its EV rollout, will now be built in both China and Belgium, a hedge against European duties on Chinese-made vehicles. Meanwhile, its South Carolina plant will see increased output to offset U.S. import exposure—yet supply chain reliance on non-U.S. components may still trigger tariff penalties.
These production shifts come amid declining margins and investor fatigue. Volvo shares now trade at SEK 21, down 66% over three years—a brutal descent that has prompted institutional investors to press for leadership with operational rigor.
“This isn’t just a quarterly slump. It's structural,” said a senior equity fund manager with holdings in several European automakers. “You can’t bleed value like this and expect shareholders to wait it out without credible leadership change.”
The Jim Rowan Experiment: Visionary Ambitions, Operational Realities
When Jim Rowan took the reins in 2022, expectations were high. A former tech executive, he brought a clear mandate: transform Volvo into a software-centric EV powerhouse. For a company rooted in mechanical engineering and understated Scandinavian design, the transition was always going to be fraught.
Rowan’s roadmap centered on full electrification by 2030, coupled with a push into advanced connectivity and autonomous features. But geopolitical tremors and unrelenting industry flux conspired against rapid transformation.
Though the ambition was applauded, execution faltered. Electrification progress lagged forecasts, and the high cost of software development compressed margins. Simultaneously, new tariffs and protectionist policies globally hamstrung operations and investment planning.
Key Challenges, Opportunities, and Strategic Actions in Automotive Software Transformation
| Category | Details |
|---|---|
| Challenges | - Legacy systems and integration complexity |
| - Cybersecurity risks | |
| - Talent and organizational challenges | |
| - Lack of standardization and ecosystem building | |
| - Meeting customer expectations for digital experiences | |
| Opportunities | - Leveraging generative AI for enhanced productivity and innovation |
| - New revenue models through connectivity (e.g., subscriptions, OTA updates) | |
| - Continuous updates via software-defined hardware | |
| Strategic Actions | - Investing in R&D and ecosystem development |
| - Adopting flexible architectures with open standards | |
| - Focusing on change management to foster a software-centric mindset |
“He had a playbook for a world that no longer exists,” said one person familiar with internal board discussions. “The industry moved, the borders hardened, and suddenly his runway vanished.”
Rowan’s departure, effective March 31, comes after multiple earnings warnings and increasing pressure from major stakeholders seeking a change in strategy—and tone.
Samuelsson Returns: The Reluctant Architect of Stability
Håkan Samuelsson is no stranger to volatility. His previous tenure from 2012 to 2022 is widely credited with reviving Volvo as a global brand—repositioning it as a premium contender and laying the early groundwork for electrification. Under his stewardship, Volvo saw its reputation for safety fused with modern aesthetics and technological sophistication.
His hallmark? Disciplined industrial execution and balanced investment.
Now, at 73, he returns not to launch a new vision but to steady a faltering one.
Geely Chairman Eric Li reportedly described Samuelsson as having “industrial depth,” a quality that reflects his comfort with complex manufacturing environments and long-cycle capital investments.
Geely Holding Group acquired Volvo Cars from Ford Motor Company in 2010. This acquisition established Geely as the parent company of Volvo Cars, defining their current ownership structure and relationship.
Yet his return is not without risk. Some market watchers question whether Samuelsson’s cautious, methodical style can adapt to the faster tempo and greater volatility of today’s automotive landscape.
“The concern is whether you can run today’s EV race with yesterday’s legs,” noted one EV supply chain consultant. “But it may also be what’s needed—less sprint, more marathon.”
Strategic Pivot: From EV Extremism to Hybrid Pragmatism
The most immediate sign of Volvo’s strategic reorientation under Samuelsson is the scaling back of its aggressive electrification goal. The once-ambitious 2030 full-electric target has been replaced with a more measured hybrid-EV blend.
This reflects not just corporate strategy, but market realism. Global EV adoption has plateaued in several regions due to high costs, insufficient charging infrastructure, and consumer hesitation.
Global Electric Vehicle Sales Trends: Recent Data and Projections
| Metric | Region | 2023 Data/Trend | 2024 Data/Trend/Projection | Notes |
|---|---|---|---|---|
| Global EV Sales Growth | Global | Approx. 14 million sales (+35% vs 2022) | Approx. 17.1 million sales (+25% vs 2023). Projected growth of 18% in 2025 to over 20 million units. | Growth remains robust, but percentage increases slowed from 2022 to 2023 and further into 2024. |
| EV Market Share | Global | Approx. 18% of new car sales | Estimated over 20% of new car sales globally. | Share varies significantly by region, with China leading at ~45%, Europe at ~25%, and the U.S. at ~11% in early 2024. |
| Sales Growth Rate Trend | Europe (EU+EFTA+UK) | Approx. 3.2 million sales (+20% vs 2022) | Approx. 3.0 million sales (-3% vs 2023). Projected growth of 15% in 2025. | Decline attributed to reduced subsidies (e.g., Germany), economic uncertainty, and infrastructure challenges. |
| Sales Growth Rate Trend | China | Approx. 8.3 million sales (~60% of global) | Approx. 11 million sales (+40% vs 2023). Projected growth of ~17% in 2025. | China continues strong growth, especially in PHEVs/EREVs, with EV share projected to reach nearly 60% by 2025. |
| Sales Growth Rate Trend | USA & Canada | Approx. 1.65 million sales (+50% vs 2022) | Approx. 1.8 million sales (+9% vs 2023). Projected growth of ~16% in 2025. | Slower growth due to affordability concerns, infrastructure gaps, and potential policy changes (e.g., tax credit reductions). |
| Battery EV (BEV) Growth | Global | BEV sales growth halved from ~65% (2022) to ~32% | BEV sales growth estimated at ~15% for full year 2024, projected to recover to ~28% by end of 2025. | Slower BEV growth compared to PHEVs in regions like China during 2024; affordability and incentives play key roles. |
| Plateauing Factors | US & Europe | N/A | Affordability concerns (EVs ~15%+ more expensive), charging infrastructure gaps, range anxiety, reduction in incentives. | High interest rates and economic uncertainty also contribute to slower adoption among mainstream consumers compared to early adopters. |
Volvo’s shift may position it more favorably in transitional markets where plug-in hybrids still offer the best combination of cost-efficiency, range, and flexibility.
“There’s a case to be made that going ‘all in’ on EVs too early exposes you to execution risk and policy volatility,” said a strategist at a leading auto supplier. “Blending the portfolio buys you time—and margin.”
Navigating the Tariff Maelstrom: Production as Policy
The return of Samuelsson also signals a hard pivot toward operational localization as a hedge against geopolitical instability. U.S. tariffs, effective April 2, and impending EU actions have forced Volvo to rethink its manufacturing footprint.
Key Impacts of Automotive Tariffs on Production, Costs, Employment, and the Economy
| Category | Impact |
|---|---|
| Production | - 30% reduction in North American vehicle output (20,000 fewer vehicles daily). |
| - Supply chain disruptions due to increased cross-border costs. | |
| - Potential relocation of production to the U.S., increasing labor costs and inefficiencies. | |
| Costs & Pricing | - Vehicle production costs rise by $3,500–$12,000 per unit. |
| - Higher consumer prices, with EVs particularly affected due to reliance on global materials. | |
| Employment | - Risk of job losses for up to 1 million U.S. manufacturing workers and 2 million dealership employees. |
| - Global job losses in countries like Germany and Italy due to reduced exports. | |
| Broader Economy | - Delayed investments in new vehicle programs and infrastructure due to uncertainty. |
| - Retaliatory trade measures from other nations impacting global competitiveness. |
This table summarizes the key impacts of automotive tariffs across production, costs, employment, and broader economic factors.
In response, the company is expanding output at its Ridgeville, South Carolina plant and diversifying EX30 production into Belgium. This dual-pronged strategy reflects a shift in how automakers must now treat tariffs—as quasi-permanent features of the landscape, not transient shocks.
“The tariff environment is now part of your cost structure, not just a risk variable,” a European trade advisor remarked. “Samuelsson understands this. It’s why he’s back.”
Trusting the Past to Secure the Future?
For investors, the reappointment of a legacy CEO typically signals conservatism, not growth. But Volvo’s board appears to be betting that stability—and cost containment—will restore credibility faster than a bold, uncertain bet on future tech.
Samuelsson’s playbook is likely to prioritize:
- Cost Optimization: Cutting discretionary investments, particularly in less mature software ventures.
- Strategic Localization: Increasing U.S. and EU production to shield against tariff volatility.
- Flexible Electrification: Maintaining EV momentum while monetizing hybrids to support cash flow.
Whether this strategy revives Volvo’s battered share price remains an open question. Some analysts believe the stock could see a rebound if Samuelsson stabilizes margins by late 2025. Others caution that competition from faster-moving peers may widen the innovation gap.
“The best-case scenario is a recovery arc,” said one portfolio manager. “The worst is that Volvo becomes the Saab of this generation—solid engineering, but left behind.”
The Road Ahead: Opportunity or Holding Pattern?
As Håkan Samuelsson returns to Volvo's C-suite, he inherits a company both transformed and trapped. Transformed by a decade of investment in electrification and global expansion; trapped by rising tariffs, margin pressure, and uncertain consumer behavior.
The next 24 months will determine whether Volvo can adapt to this new, fragmented automotive order—one where nimbleness matters as much as legacy, and where the race to electrify must be matched by the ability to withstand political and economic shocks.
This is not just about who leads, but how the company leads through a new era of constraint and recalibration.
In the short term, steady hands may soothe markets. But in the long term, even those hands must steer into the storm.