Volvo CEO Håkan Samuelsson has signaled that the Swedish automaker may consider producing electric vehicles (EVs) developed by its Chinese parent company, Geely, at its plant in South Carolina. This move could potentially circumvent strict US tariffs on Chinese EVs, though Samuelsson emphasized that regulatory hurdles remain a significant barrier.
Regulatory Challenges Ahead
Geely’s EVs, such as its Galaxy hatchback, are priced as low as $9,700 in China but face tariffs exceeding 100% in the US. Additionally, restrictions on Chinese-developed vehicle software and hardware, introduced by the Biden administration, complicate any potential expansion. Samuelsson told reporters, "Assuming that, of course, we could discuss building cars in the plant, as we have capacity," but stressed that compliance with US regulations is a prerequisite.
Geely’s Global Ambitions
Geely, China’s second-largest automaker, owns Volvo and Polestar and has rapidly expanded its EV offerings in Europe and China. Executives have hinted at plans to enter the US market within the next two to three years. Building EVs at Volvo’s Charleston plant could provide a strategic foothold, though the regulatory environment remains a significant obstacle.
"It will be a huge competition pressure on the old industry from the new," Samuelsson said, acknowledging the growing influence of Chinese automakers.
Political Pushback
Any attempt to introduce Chinese EVs to the US market is likely to face opposition. Republican Senator Bernie Moreno has proposed legislation that would ban Chinese vehicles entirely, citing concerns over national security and the impact on the domestic auto industry. US executives have also warned that cheap Chinese EVs could devastate local manufacturers.
Volvo’s deliberations come amid declining revenue and profits in its first-quarter earnings, driven by slowing EV sales in the US and intense competition in China. Samuelsson’s comments highlight the growing pressure on Western automakers to adapt as Chinese EV makers expand globally.