The Biden administration has announced a significant increase in tariffs on a range of Chinese products. Tariffs on certain products such as electric cars and electric car batteries will take effect on August 1st. With the tariff hike, Volvo Cars will be shifting some production of its best-selling electric car models away from China, leading to delays in shipping to the United States.
On Wednesday, Volvo Cars spokesperson stated that due to the tariffs imposed by the United States on electric cars imported from China, the delivery of the EX30 electric car to the US will be delayed in order to expand production of this compact SUV outside of China.
Volvo had previously announced plans to begin selling the EX30 in the US later this year, but the company spokesperson told Reuters on Wednesday that deliveries will not start until 2025, partly due to the US government imposing tariffs of over 100% on Chinese imported electric cars.
Last month, the US government announced a substantial increase in tariffs on Chinese imported products, with tariffs on electric cars rising from 27.5% to over 100%.
Following this, the European Commission also announced additional tariffs of up to 37.6% on imported Chinese electric cars starting from July 5th. Zhejiang Geely Holding Group, Volvo’s major shareholder, will face a 29.9% import tariff.
According to Bloomberg, Volvo’s Deputy CEO and Chief Commercial Officer, Bjorn Annwall, mentioned in an interview in Sweden that Volvo plans to start production of the EX30 model at its Belgium factory.
Annwall stated that the company decided to wait in order to optimize its production footprint. “Due to new tariffs in the US and potential tariffs in the EU,” he said, “US customers who were hoping to receive this car this fall will unfortunately have to wait until next year.”
Volvo began production of the EX30 in Zhangjiakou, Hebei Province, and will gradually increase production of this small SUV in Belgium next year. Annwall mentioned that if EU tariffs come into effect next month, imported EX30s to Europe may face an additional 20% tariff for about a year.
“If tariffs are implemented, it will impact us, our customers, and our sales for a period of time, but this is within a transition period and only for one model, so it is manageable,” he said. “The bigger concern is what might happen if a broader global trade war erupts.”
Volvo stated that the Belgium factory will mainly serve North America and Europe.