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The wheels have come off — literally and figuratively — at Volvo’s only United States manufacturing plant in Ridgeville, South Carolina.
A week after FITSNews reported on the deepening turmoil surrounding the automaker’s Lowcountry operations, a newly filed lawsuit revealed Volvo is now locked in an emergency legal battle with a critical supplier — Lear Corporation — over the shutdown of its assembly line and the sudden furlough of hundreds of workers.
On May 29, 2025, Volvo Car USA filed a lawsuit (.pdf) against Lear in Berkeley County circuit court, accusing the seat manufacturer of breaching a longstanding contract by halting shipments of custom seat assemblies for the company’s EX90 electric sport utility vehicles. According to the complaint and a motion for emergency relief, Lear’s refusal to deliver essential parts has brought production to a standstill.
The South Carolina plant is responsible for assembling the EX90 – one of Volvo’s flagship EV models. It is also responsible for manufacturing the Polestar 3 electric SUV.
“The entire assembly line ground to a halt,” Volvo’s attorneys wrote in their emergency request for a restraining order, calling Lear’s actions “catastrophic” and warning that a prolonged shutdown would lead to lasting damage — not only to production targets, but to workforce stability and brand reputation.
The lawsuit was removed to federal court the same day it was filed.
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A BREAKDOWN IN THE SUPPLY CHAIN
Volvo says Lear abruptly demanded a price increase on parts due to rising tariffs — a demand the automaker rejected, citing a firm contractual agreement. By mid-May, Lear had stopped all deliveries, triggering a cascade of operational failures that culminated in the complete suspension of production in Ridgeville.
The lawsuit claims Lear is the exclusive source for the seat assemblies and that replacement parts would take three years to develop and qualify. Emails submitted as exhibits (.pdf) show Lear’s plant manager in Duncan, S.C. confirming that shipments would cease unless pricing terms were renegotiated.
“Lear is the sole source of the parts at issue,” the complaint stated. “They are unique to the EX90 and Polestar 3 vehicles and cannot be sourced elsewhere on the required timeline.”
Volvo is now seeking a temporary restraining order and preliminary injunction (.pdf) to force Lear to resume shipments while the case plays out in court.
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RELATED | MORE PROBLEMS FOR VOLVO IN SOUTH CAROLINA
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This legal drama is the latest blow to Volvo’s South Carolina venture. As FITSNews founding editor Will Folks reported last week, Volvo’s $1.2 billion plant — once hailed as a crown jewel of the state’s economic development portfolio — has failed to meet production goals and employment targets. Last month, 5% of the facility’s workforce was laid off.
The EX90, Volvo’s flagship electric SUV, was supposed to launch from Ridgeville in 2023. After multiple delays, it finally entered limited production in 2024 — but never hit the anticipated volume. Meanwhile, a planned second line for the Polestar 3 was quietly scrapped as the company faced global headwinds.
According to Reuters, Polestar is “grappling with a cash crunch” amid a decline in demand for electric vehicles – hoping “to pull itself out of chronic losses and mounting debt” by focusing exclusively on the European market.
Meanwhile, back in South Carolina, local leaders have expressed concerns about whether Volvo is rethinking its Palmetto State operations altogether.
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WHAT’S NEXT?
Lear has removed the Volvo lawsuit to U.S. District Court, citing federal jurisdiction due to the interstate and international nature of the dispute. A federal judge will now consider Volvo’s request for immediate injunctive relief to restart the supply chain before deeper economic damage sets in.
Volvo’s filings emphasize the urgency the company is facing: The longer its plant sits idle, the harder it will be to retain a trained workforce — and the greater the threat to the company’s EV strategy in North America.
In the broader picture, the breakdown with Lear illustrates just how vulnerable modern auto manufacturing has become to supply chain friction – especially as global automakers transition to electric vehicles and face geopolitical headwinds.
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For South Carolina taxpayers – who helped fund this ambitious project — the stakes couldn’t be higher.
Hundreds of millions of dollars have been pumped into Volvo’s Ridgeville facility – including $40 million for a state-of-the-art interchange on Interstate 26. That’s money which could have been allocated toward far more pressing infrastructure needs.
At least $330 million in taxpayer-funded subsidies (that we know of) were earmarked for Volvo’s Berkeley County facility – including state grants for the development of its Lowcountry manufacturing facility as well as tens of millions in “economic development bond proceeds.” Most of this money was blown between 2015-2017 – including $110 million taken from Berkeley County taxpayers.
Volvo also continues to receive millions of dollars in undisclosed, recurring subsidies from state taxpayers for “job development” tax credits.
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THE COMPLAINT…
(S.C. Ninth Judicial Circuit)
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ABOUT THE AUTHOR …
Jenn Wood is FITSNews’ incomparable research director. She’s also the producer of the FITSFiles and Cheer Incorporated podcasts and leading expert on all things Murdaugh/ South Carolina justice. A former private investigator with a criminal justice degree, evildoers beware, Jenn Wood is far from your average journalist! A deep dive researcher with a passion for truth and a heart for victims, this mom of two is pretty much a superhero in FITSNews country. Did we mention she’s married to a rocket scientist? (Lucky guy!) Got a story idea or a tip for Jenn? Email her at jenn@fitsnews.com.
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