Polestar Begins U.S. Production to Dodge Tariffs on Chinese-Made Cars

Swedish electric-vehicle manufacturer Polestar has started production of its Polestar 3 SUVs in the U.S. to avoid tariffs on Chinese-made cars. The production at Volvo's plant in South Carolina is expected to reach full capacity within two months. Deliveries will begin next month, initially targeting the U.S. market.

Swedish electric-vehicle manufacturer Polestar advanced its strategy to sidestep hefty tariffs on Chinese-made cars by beginning production of its Polestar 3 SUV in the United States.

Amid rising tariffs, Polestar, predominantly owned by China's Geely, initiated production at Volvo's plant in South Carolina. This move is poised to serve customers across the U.S. and Europe, as disclosed by Chief Executive Thomas Ingenlath. The bulk of Polestar 3s will originate from the South Carolina factory.

Production at this facility is projected to hit full volume in two months, although Ingenlath withheld the plant's capacity figures. U.S. customer deliveries will commence next month, followed by European markets. The company, which sold 3,555 Polestar 2 sedans in the U.S. during the first half of the year, also plans to manufacture Polestar 4 SUV coupes in South Korea by mid-2025.

In light of high-interest rates affecting consumer demand for EVs, Polestar aims to cut material and logistics costs and boost efficiency to achieve break-even cash flow by 2025.

(With inputs from agencies.)