Volvo May Sidestep Tariff Threat Switching BEV Production to Europe

Volvo may switch its battery-electric vehicle production capacity to Europe from China in a bid to sidestep planned punitive tariffs that the European Union is expected to impose on Chinese cars because of unfair government subsidies given to its domestic automakers.

The move echoes Volvo's use of its plant in Charleston, SC, to build the flagship EX90 for the North American market to comply with the U.S.'s Inflation Reduction Act. It also follows the company's launching of its "BEV passport" detailing where its major components are made.

The U.K.’s Times newspaper reports the Geely-owned brand is shifting production to its Belgium plant in Ghent, citing company sources who claimed the group had been considering halting all deliveries of BEVs made in China to Europe if the tariffs were imposed.

Now it will build its flagship EX90 and entry-level EX30 in Belgium as a solution to the issue although major components, such as the battery packs, would also have to be built with in EU’s territorial confines to escape origin-of-source restrictions.

The newspaper adds that production of certain models targeting sales in the U.K. could also be moved to the Belgium plant.

Last year the trade policy body, the European Commission, launched an investigation last into whether BEVs made in China were receiving distortive subsidies and deserved punitive tariffs so that they could not unfairly undercut domestic built products. The investigation is expected to report its findings by November this year and could launch new tariffs nine months afterward.