Volvo shifting EV production to Belgium to evade China tariffs, The Times reports By Reuters

(Reuters) – Volvo Cars has begun moving production of Chinese-made electric cars to Belgium in the hope that the European Union will press ahead with a crackdown on Beijing-backed imports, The Times newspaper reported on Saturday.

The newspaper, quoting informed sources in the company, said that Volvo, whose majority shares are owned by the Chinese company Geely, is considering halting sales of electric cars manufactured in China and destined for Europe if customs duties are imposed.

However, the report added that moving production of the Volvo EX30 and EX90 models from China to Belgium is expected to eliminate the need for the company to do so and that the company insisted that suspending sales of electric cars made in China was no longer under consideration.

Manufacturing of some Volvo models destined for the UK could also be moved to Belgium, The Times said.

Volvo did not immediately respond to Reuters' request for comment outside normal business hours.

The European Commission, which oversees trade policy in the 27-nation European Union, launched an investigation last year into whether fully electric cars made in China receive distorting subsidies and trigger additional tariffs.

The anti-subsidy investigation, which officially began on October 4, could last up to 13 months. The Commission can impose temporary anti-subsidy fees nine months after the start of the investigation.

Relations between China and the European Union have become strained due to factors including Beijing's close relations with Moscow after the Russian invasion of Ukraine. The European Union seeks to reduce its dependence on the second largest economy in the world, especially with regard to materials and products needed for the green transition.