Volvo Shifts Production From China to Belgium

Volvo has announced that it will be shifting the production of its electric vehicles (EVs) to Belgium from China amidst reports that the European Union (EU) will be imposing tariffs on China.

Bloomberg reports that the company’s EX30 and EX90 models will be manufactured in Belgium effective immediately, with many factories already beginning production. What’s more, Volvo announced that some cars that are bound for the United Kingdom will also be manufactured in Belgium, though it’s unclear which models.

A flurry of anti-dumping investigations against Beijing has resulted from trade tensions between the EU and China and claims of improper subsidies. As early as next week, the EU is anticipated to inform Chinese manufacturers of EVs whether it plans to apply temporary tariffs on July 4 that would raise import levies above the existing 10% threshold. China declared last week that it will take steps to protect its interests after accusing the EU of trying to “suppress” Chinese businesses.

China’s charges of unfair competition are baseless, according to Xinhua News Agency, which cited earlier remarks made by Commerce Minister Wang Wentao. According to Xinhua, Wang expressed his wish that the EU would give up trade protectionism and go back to communicating and working together.

Last year, Volvo announced that it intended to convert to an all-electric vehicle manufacturer by early 2024, ending manufacturing of any remaining diesel models.

However, the company still has combustion engines on the market and has since moved its intended target date to 2030, according to ABC 7. Moreover, replacements for the company’s current sedan and station wagon models are reportedly in the works and should be released in the upcoming years. To sell those, though, they must be able to present a convincing business case. To put it another way, consumers must continue purchasing them, or the business may decide to produce solely SUV versions.

Diesel models have been steadily losing market share; in July 2023, they contributed for just over 14% of all new car sales in Europe, down from over 50% in 2015.