The plant is initially expected to make about 100,000 vehicles a year, with the first ones ready in 2018, according to Volvo. It expects to employ about 2,000 people at the Berkeley County plant, about 30 miles from the Port of Charleston, over the next decade. That could grow to 4,000 workers eventually.

The state plans to borrow about $150 million to build the site and a new interchange on Interstate 26, South Carolina Commerce Secretary Bobby Hitt said at a news conference at the Governor's Mansion.

South Carolina beat four other states, including Georgia, which also made a hard sell for the automaker.

"What I believe won Volvo Cars for South Carolina was our workers. They saw the fact this is a state where we build planes," said Gov. Nikki Haley, referring to the state's last big economic development prize, Boeing.

Georgia offered Volvo a site near Savannah and has been pushing hard to get more automakers to come there. The Georgia Legislature offered $1.3 million in tax breaks to Mercedes-Benz in a chaotic final day of its session in April. It wasn't clear what Georgia offered Volvo.

Construction on the South Carolina plant is expected to begin in the fall. Volvo has no timetable for when it will have all 4,000 workers at the plan, said Lex Kerssemakers, president and CEO of Volvo Cars of North America.

The company said vehicles made at the plant will be for the U.S. market as well as for export. Volvo has two plants in Europe and two in China.

"The reason we came to South Carolina is accessibility. We want to be very close to the sea. We will export those cars," Lex Kerssemakers, president and CEO of Volvo Cars North America, said in a phone interview.

South Carolina's technical college system will work to recruit and train employees for the plant.

Volvo becomes the second European car maker to locate in South Carolina. BMW built a plant in Greer in 1994.