Volvo relocates China-made EV production to Belgium

Volvo Cars has begun relocating production of Chinese-manufactured electric vehicles to Belgium, anticipating a potential crackdown by the European Union (EU) on Beijing-subsidised imports, according to Reuters citing the Times.

The company, largely owned by China’s Geely, had reportedly contemplated ceasing sales of Chinese-built EVs destined for Europe if tariffs were imposed. However, insiders suggest that shifting production of Volvo’s EX30 and EX90 models to Belgium is expected to mitigate this necessity, with the company no longer considering suspending sales of EVs made in China.

Additionally, the production of Volvo models destined for the United Kingdom may be transferred to Belgium. Volvo has yet to respond to Reuters’ request for comment.

The European Commission, responsible for trade policy across the 27-nation EU, initiated an investigation last year into whether fully electric cars manufactured in China were receiving unfair subsidies warranting additional tariffs.

This anti-subsidy investigation, launched on Oct. 4, has a duration of up to 13 months, with provisional anti-subsidy duties possible nine months after the probe’s commencement.

Tensions between China and the EU have been exacerbated by various factors, including Beijing’s closer alignment with Moscow following the Russia/Ukraine conflict. Consequently, the EU is striving to diminish its dependency on China, particularly for materials and products vital to its green transition.