Incoming European Union import tariff rises mean Volvo is considering shifting supply of its Chinese-built EX30 to non-EU markets, such as the UK, while it readies its Belgium factory to take over local market production early next year.
The crossover is currently the third best-selling electric car in Europe behind the Tesla Model 3 and Tesla Model Y but is currently manufactured in a plant run by parent firm Geely in Zhangjiakou, China. That means it is set to be hit by EU tariffs on EVs imported from China from 31 October onwards.
To avoid the tariffs, Volvo has already confirmed that it will start production of the EX30 at its factory in Ghent, Belgium, where the EX40 is currently made. Work is ongoing to prepare the facility and supply chain, with EX30 manufacturing slated to begin there in the first half of 2025.
Volvo CEO Jim Rowan said the tariffs present a “short-term problem” for Volvo with EX30 models sold in Europe and require the firm to either cut profits on the car or increase pricing. He hinted that could lead to a focus on markets outside the EU.
“We'll start [EX30] production at our Ghent facility in Belgium in the first half of next year and then ramp up through the gears,” said Rowan. “In the meantime, we can supply that car to many other regions which are not yet affected [by tariffs]: a lot of countries in South-East Asia, and the UK is an example of that.”
Volvo will launch the EX30 in the US after 2025, although cars will be supplied from Ghent due to the US’s stiff tariffs on Chinese-built EVs.
Despite the challenges of tariffs, a sales slowdown and higher interest rates, Volvo slightly increased its sales in the third quarter of 2024, with sales of electric and plug-in hybrid cars having doubled year on year, driven substantially by the success of the EX30.
Volvo’s high proportion of electrified sales means it is ahead of its fleet emissions targets in the EU and other markets, and the firm has acknowledged it could look to sell some of those spare credits to other car makers.
Volvo financial chief Johan Ekdahl said: “We are one of the reasonably few in a good spot when it comes to our EV penetration in terms of potential credits. That is a potential significant upside. We don't guide on specific amounts because it requires negotiations with other parties, and it's not something we'll rely upon for our financial ambitions – but there is a potential reasonably substantial upside.”
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