Tariff Response: Polestar 3 Production Begins in South Carolina

The U.S. government recently announced severe tariffs on Chinese-built vehicles, reaching 100 percent in some cases. While some of the staggering number of Chinese automakers have expressed no interest in selling here, some of the United States’ more recognizable auto brands are owned by companies in the country, including Volvo and Polestar. Both are owned by Geely, a Chinese corporation, but to get around tariffs on the upcoming Polestar 3, the automaker has moved production of the electric SUV to Volvo’s factory in South Carolina.

The Carolina-built Polestar 3 will be sold in the U.S. and Europe, and company CEO Thomas Ingenlath told Reuters, “If you look at the bulk of volume that we will produce of the Polestar 3, of course, the majority of that volume will be here coming out of the South Carolina factory.” He didn’t detail production volumes but said that the factory would reach full capacity within two months.  

Polestar joins Volvo and other automakers in localizing vehicle production to cope with tariffs and tax credit eligibility. Hyundai and Kia have begun building EVs at their U.S. factories to open eligibility for up to $7,500 in federal tax credits. Volvo will build its new EX90 SUV in South Carolina, though software hiccups and other delays have tarnished its rollout.

Chinese-built EVs may eventually make it here, though it’s unclear how or if they’d get on under the harsh tariffs. Their low prices have made them attractive in global markets, but a 100 percent tariff would put a quick end to that trend here. That said, Chinese companies are making inroads in Canada and Mexico, so it could only be a matter of time before they arrive in the States.

[Images: Polestar]

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