European EV tariffs could impact local industry, warns Polestar CFO

EV Tariffs Impact: Polestar's Chief Financial Officer (CFO), Per Ansgar, has raised concerns about the potential negative impact of import tariffs imposed by the European Union and the United States on Chinese-made electric vehicles (EVs) on European-based companies. 

During a conference call discussing the company's second quarter report, Ansgar highlighted the challenges facing the European industry due to these tariffs.

Tariffs speed production shift

The recent steep tariffs introduced by the US, EU, and Canada on cars manufactured in China have accelerated automakers' plans to relocate production to other countries. 

Ansgar, who met with the European Commission on Thursday, expressed scepticism about the Commission's willingness to protect European industries by imposing additional tariffs, which he believes could hurt companies investing in technology and creating jobs within Europe.

"For Polestar and the European industry, it would be beneficial to avoid further increases in tariffs," Ansgar noted.

Until recently, Polestar produced all its vehicles in China through facilities owned by its co-founders, Geely and Volvo Cars, making it particularly vulnerable to these tariffs.

Polestar faces steep duties

In Europe, Polestar faces a 19.3 per cent tariff due to its association with Geely, in addition to the EU's standard 10 per cent import duty on cars. The European Commission states that these measures are intended to create a fairer market by addressing what it views as unfair subsidies.

However, Polestar has recently begun producing its Polestar 3 SUV at Volvo Cars' plant in South Carolina, which is expected to serve both US and European markets. 

The company is also assessing the impact of Canada's tariff announcement on its operations and has indicated that its South Carolina facility will play a crucial role in its strategy.

Polestar 4 shifts production

While the Polestar 2 will continue to be manufactured solely in China for now, the company plans to shift part of its production for the Polestar 4 to South Korea, with production expected to commence in mid-2025. 

This facility, managed by Renault Korea Motors, is anticipated to supply the US market, and discussions are ongoing to potentially supply Europe from this plant as well.

(With Reuters Inputs)