Volvo shifts electric car production to Belgium amidst EU tariff hike
As reported by Bloomberg, Volvo is withdrawing the production of electric cars from China and moving it to Belgium. This shift is related to the European Commission's planned increase in tariffs on Chinese electric vehicles, which are currently at 10 percent. The issue is expected to be clarified in the coming week.
Volvo Cars AB, the passenger car manufacturer, whose majority owner is the Chinese conglomerate Geely, has started transferring the production of electric vehicles from China to Belgium, Bloomberg reports. The reason for this move is the European Union's (EU) plan to raise the duty on Chinese electric vehicles from the current 10-percent level.
According to Bloomberg's unofficial information, besides transferring the production of the EX30 and EX90 models from China to Belgium, the car manufacturer may also relocate the assembly of some Volvo models destined for the United Kingdom to Europe.
Let us recall that the production of the EX30 model started in the autumn of 2023 in Zhangjiakou, China. In November last year, it was reported that in response to high demand, Volvo Cars would also start EX30 production at the Ghent plant in Belgium from 2025.
Among Western car manufacturers, Volvo, being 80 percent owned by the Chinese conglomerate Geely, is seen as the most vulnerable to potential higher tariffs. The European Commission intends to raise these tariffs starting 4 July. The new tariff levels are expected to be announced in the coming week.
Anti-dumping policy
As reported by the portal energetyka24.com, the European Commission's decision stems from an anti-dumping investigation it has been conducting since 2023. The investigation looks into hidden mechanisms of state support for Chinese production that lower the price of Chinese electric cars. Anti-dumping measures target imported products sold at prices significantly lower than those in the producer's domestic market.
Due to state subsidies, China denies that its electric vehicle industry has been growing dynamically. China hopes the EU will abandon trade protectionism and return to a path of dialogue and cooperation. According to European Commission estimates, China's share in the European electric vehicle market could reach 15 percent next year.
The United States maintains a restrictive policy towards Chinese electric cars. The duty on vehicles from China is very high, reaching 27.5 percent.
