Even though Donald Trump is now the president of the United States again, he has no intention of changing his predecessor's ban on Chinese cars. This could be serious for Volvo.
Major bank SEB is warning that Swedish carmaker Volvo Cars is at risk of being banned in the US due to new rules that specifically target companies with Chinese connections.
Volvo, owned by Chinese Geely Holding, has a significant part of its development in China, which could potentially trigger a sales ban.
SEB believes that such a ban would have devastating consequences for Volvo Cars. The US is one of Volvo's most important markets, and last year the company sold around 125,000 cars in the country.
This corresponds to 16 percent of Volvo's total sales.
This is written by Swedish Dagens Industri .
Although Volvo has a factory in South Carolina, that is not expected to be enough to protect the company from the new rules, which were finalized under the Biden administration and take effect on March 17.
The aim of the rules is to introduce stricter requirements for supply chains and connected vehicles, with a particular focus on companies with ties to China.
SEB points out that the new rule creates great uncertainty for Volvo Cars, and that the company's future in the US market is uncertain.
The bank emphasizes that there is still a high risk associated with Volvo, despite the low valuation of the stock.
Recently, SEB downgraded its rating on Volvo's stock, which led to a minor drop in the share price.
SEB expects 2025 to be a pivotal year for Volvo Cars. The bank predicts a slight increase in sales and stable profits, but at the same time highlights the uncertainty surrounding cash flow and future investments.
According to information that the Confederation of Danish Industry (DI) has gained access to, Volvo Cars is working to find solutions that can prevent a sales ban.
The company is exploring options to replace Chinese technology in its connected cars before the rules take effect for the 2027 model year.
However, it remains to be seen whether Volvo's efforts will be sufficient to ensure the company's continued presence in the US market.
This is not the first time that SEB has sent tremors through the Geely group. Back in January 2024, the same bank estimated that Polestar is worth 0 kroner.
