(Yicai) Aug. 16 -- Polestar, which is an electric car brand owned by Sweden’s Volvo Cars and Volvo’s parent firm Geely Automobile Holdings, is shifting manufacturing to countries outside of China to circumvent EU and US tariffs on China-made new energy vehicles.

Production of the Polestar 3 will be in South Carolina, the Goteburg-based firm said yesterday. The South Carolina factory will be dedicated to producing cars for the European and US markets.

And production of the Polestar 4 should start in South Korea in 2025, it added. Reports have it that Polestar will use a Renault plant in South Korea in which Hangzhou-based Geely has a stake to manufacture cars and sell them to Europe and North America.

Polestar’s main manufacturing base is in Chengdu, southwestern Sichuan province, but as most of its autos are exported to the EU and North America, this would leave the company exposed to the new taxes.

The US will hike the tax on China’s EV exports to 100 percent from 25 percent this year, the White House said on May 14.

The EU will impose provisional countervailing duties ranging from 17.4 percent to 38.1 percent on China-made EVs to offset local subsidies, the EU government said on June 12 following the conclusion of its anti-subsidy investigation launched in October last year. This is on top of the current 10 percent tariff.

Polestar’s worldwide sales have been growing each year. Last year, sales jumped 6 percent year on year to 54,626 units and in 2022, they surged 77.5 percent to 51,500 autos.

Volvo reduced its holdings in Polestar to 18 percent in February and Geely Sweden Holdings is now its main shareholder.

Editors: Xu Wei, Kim Taylor