Volvo Shifts EV Production to Belgium Amid Anticipated EU Crackdown

Volvo Cars has begun relocating the production of its electric vehicles (EVs) from China to Belgium. According to a report by The Times on Saturday, this strategic move anticipates the European Union’s (EU) potential crackdown on imports subsidized by Beijing.

Volvo Production Shift Details:

Volvo, majority-owned by China’s Geely, was reportedly contemplating halting sales of Chinese-built EVs to Europe if the EU introduced tariffs on these imports.

However, by shifting the production of its EX30 and EX90 models to Belgium, Volvo aims to circumvent the potential impact of such tariffs. As a result, the report noted that suspending sales of EVs manufactured in China is no longer being considered.

The relocation strategy might also extend to Volvo models destined for the United Kingdom, potentially moving their production to Belgium. This shift is part of Volvo’s broader response to the EU’s evolving trade landscape and regulatory environment.

EU’s Anti-Subsidy Investigation:

The European Commission, which regulates trade policy for the 27-nation EU, initiated an investigation last year to determine whether fully electric cars made in China were benefiting from distortive subsidies that could warrant additional tariffs.

The formal anti-subsidy investigation began on October 4 and can last up to 13 months. Provisional anti-subsidy duties are possible within nine months of the investigation’s start.

Geopolitical Context:

Geopolitical factors influence the EU’s scrutiny of Chinese subsidies and broader trade tensions, including China’s close relationship with Russia following its invasion of Ukraine.

The EU seeks to ease its dependence on China, particularly for materials and products essential for its green transition.

While Volvo has not yet commented on the report outside regular business hours, the company’s decision to shift production reflects a proactive approach to mitigate the risks associated with potential EU trade measures against China.