(Reuters) -Sweden's Volvo Cars said on Wednesday it would start producing its XC60 mid-size SUV in its plant in South Carolina, United States from late 2026.

The shift highlights the automaker's exposure to U.S. President Donald Trump's auto tariffs, as it imports most of its hybrid and electric models from Europe.

XC60's sales in the United States rose by almost 23% in the first six months of 2025, the Gothenburg-based company said, adding that the model was most popular among U.S. customers.

Volvo Cars, which is owned by China's Geely Holding, had said earlier this week that it was booking an impairment charge of 11.4 billion crowns ($1.17 billion) in the second quarter related to its ES90 and EX90 models due to tariffs and launch delays.

Most of Volvo Cars' vehicles for the U.S. market, which last year accounted for 16% of group sales, are imported from Europe. The company only produces its high-end SUV EX90, at the Charleston, South Carolina factory. CEO Hakan Samuelsson has earlier said that a popular hybrid model was needed to be added to the plant.

The company's CEO had said earlier in April that the carmaker would produce more cars in the U.S, while also ramping its regionalisation efforts.

Samuelsson had told Swedish newspaper Dagens Nyheter (DN) that Volvo Cars would need up to two years to expand its U.S. car production. "In the short term, within one to two years, it will be about selling the cars we have," he said to DN, adding the situation would put pressure on profit margins but that customers will also have to pay more.

($1 = 9.7057 Swedish crowns)