Volvo shifts production of electric cars to Belgium amid EU trade measures

(MENAFN) Volvo has begun relocating its electric vehicle production from China to Belgium in a strategic attempt to bypass the European Union’s anticipated stringent regulations on subsidized imports from China. According to a UK-based news agency, this decision is driven by concerns over the EU’s impending measures, which are expected to impose substantial tariffs on such imports.

A news agency reported that Volvo is transitioning its manufacturing operations to Belgium in response to the EU’s upcoming trade policies. Informed sources within the company revealed that Volvo, which is majority-owned by the Chinese firm Geely, is considering suspending the sales of electric cars produced in China for the European market if these customs duties are implemented. This proactive approach aims to mitigate potential financial repercussions.

Additionally, the report indicated that the production shift includes the Volvo EX30 model and potentially other models destined for the UK market. This move is designed to protect against the economic impacts of the EU’s possible tariffs on electric vehicles manufactured in China.

The European Commission, responsible for trade policies in the EU’s 27 member states, initiated an investigation in October to determine whether China’s electric car industry benefits from government subsidies that might justify additional tariffs. This investigation, which started on October 4, could last up to 13 months, with the possibility of the Commission imposing provisional duties nine months into the process.

These developments occur against a backdrop of increasingly tense relations between China and the European Union. Contributing factors include China’s close ties with Moscow following the Russian-Ukrainian conflict, prompting the EU to reduce its dependence on China, especially for raw materials and products critical for the green transition. This geopolitical context further complicates the trade dynamics affecting the electric vehicle industry.