• Legacy carmakers continue to report slumping sales in China.
• Volvo is the latest. It's planning 2,500 global job cuts to save about $530 million.
• America is a problem, too. Tariffs, crushed EV incentives, and Polestar's exit also hurt.

China's merciless car market is taking a bite out of Volvo.

On Friday, the Swedish luxury automaker said revenue in China fell by almost 50% over the past year. The company said, like many legacy premium automakers, it's facing increasing "hypercompetition" from Chinese competitors.

Volvo plans to cut 2,500 jobs globally in response, it said, including roughly 2,000 in Sweden. That's part of an effort to slash costs by about $530 million.

"We continue to operate in a very tough environment with strong external challenges: de-globalisation, hypercompetition and climate change," CEO Håkan Samuelsson said in a statement.

It's the latest stark example of the increasing pressure on legacy automakers in China. Several big-name car companies — including Volkswagen, BMW, and Mercedes-Benz — have recently reported slowing sales from their Chinese dealerships.

Volvo is majority-owned by Geely Auto Group, a Chinese automaking conglomerate.

The company said the reductions will be made by a combination of ending consultant contracts, natural attrition, and targeted employee exit packages.

China is not Volvo's only problem. The company also said that US tariffs and the loss of Washington's consumer incentives for electrified cars squeezed margins. Volvo previously bet heavily on a rapid consumer transition to electric vehicles, aiming for an all-electric portfolio by 2030. It's since walked back that goal to include plug-in hybrid vehicles.

The automaker also said that Polestar — its EV offshoot that is exiting the US market — also posted losses.

Volvo's answer is to get more local: the automaker said it would introduce two fresh cars tailored specifically for the Chinese market by the middle of next year. Those cars will be developed in close collaboration with Geely and will include a Chinese tech stack and advanced driver-assist technologies "to make them fully competitive in China."