Volvo, the Swedish automaker owned by China‘s Geely, is moving production of its electric vehicles (EVs) from China to Belgium as the European Union (EU) considers imposing tariffs on Chinese-made EVs, according to a report by The Times.

EU Investigates Chinese EV Subsidies

The European Commission launched an investigation in October 2023 to determine whether Chinese-made EVs are receiving unfair subsidies and if additional tariffs are necessary. The probe, which can last up to 13 months, has strained relations between China and the EU, with the latter seeking to reduce its reliance on the world’s second-largest economy.

Volvo’s Production Shift

Volvo is reportedly moving production of its EX30 and EX90 models from China to Belgium to avoid potential tariffs. The Times, citing company insiders, also reported that Volvo had considered halting sales of Chinese-built EVs bound for Europe if tariffs were introduced. However, the company later insisted that suspending sales of China-made EVs was no longer being considered.

UK-Bound Models May Also Move

The manufacturing of certain Volvo models destined for the United Kingdom could also be relocated to Belgium, according to The Times report.

EVXL’s Take

The potential shift in Volvo’s EV production highlights the growing tensions between the EU and China, as well as the increasing importance of EVs in the global automotive industry. As the EU seeks to reduce its dependence on China and protect its own EV manufacturers, automakers like Volvo may need to adapt their production strategies to navigate the changing geopolitical landscape. This move could also have implications for the future of EV production and the role of China in the global EV supply chain.