The Swedish electric car manufacturer Polestar announced on Wednesday, August 14th, that it has started production of its “Polestar 3 SUV” in the United States. This move is to avoid hefty tariffs levied by the United States on cars manufactured in China.
Recent reports from Reuters indicate that the United States and Europe have imposed high tariffs on cars manufactured in China, prompting many car manufacturers to accelerate the process of shifting production capacity to countries outside of China.
Polestar, a joint electric car brand owned by the Swedish Volvo Car Group and the Chinese Zhejiang Geely Holding Group, has been manufacturing in China and exporting products to overseas markets. Currently, the Polestar 3 is manufactured at the Volvo factory in South Carolina, USA, and is being sold in the US and Europe.
CEO Thomas Ingenlath stated to Reuters on Tuesday, “If you see our Polestar 3 being produced, of course, most of it is produced at our factory in South Carolina.”
He mentioned that the factory is expected to reach full production capacity within two months but declined to reveal the factory’s production capacity. He said shipments to US customers will begin next month, followed by shipments to Europe.
Automotive valuation and research firm Kelley Blue Book estimated that Polestar sold 3,555 Polestar 2 sedans in the US in the first half of this year, which is the company’s first battery-powered car.
Polestar plans to produce the “Polestar 4 SUV” coupe at Geely’s Renault Korea factory in the second half of the year and then sell it in Europe and America.
Polestar’s decision to produce in the US and South Korea is part of the company’s plan to diversify its production locations.
Moreover, Polestar’s shift to US production is also in response to inflation, as high interest rates have dampened consumer interest in electric cars, prompting companies like electric car leader Tesla to lower prices, lay off workers, or delay production.
Ingenlath stated that Polestar laid off employees earlier this year and the company will focus on cost control, efficiency improvement, and strive to achieve cash flow breakeven by 2025.
Polestar, a Swedish electric car manufacturer under the Volvo Car Group, is headquartered in Torslanda, a suburb of Gothenburg, Sweden. Polestar produces cars in multiple countries, including China, the US, and South Korea.