In a strategic move to navigate around tariffs on Chinese-made electric vehicles in the United States, Polestar Automotive Holding UK Plc has commenced production of its Polestar 3 sport utility vehicle at a Volvo Car AB factory in Ridgeville, South Carolina. Priced at $73,400, the production of the model was initially delayed due to software issues but is now underway for distribution in both the US and Europe. The SUV, which was previously manufactured in Chengdu, China since February, signifies a significant shift for the EV maker as it grapples with operational hurdles, escalating losses, and increasing trade tensions between China and the Western countries. Measures to reduce costs have led to job cuts within the company.
Even before the US announced substantial tariff increases on EVs imported from China in May, Polestar had intentions to establish production in the US. Looking to diversify its manufacturing footprint, the company is set to kick off production of the Polestar 4 SUV in South Korea next year. Furthermore, plans are in progress to produce upcoming models in Europe.
During the first half of this year, Polestar managed to deliver approximately 20,000 cars and is gearing up to enter seven new markets by 2025. With aspirations to boost sales to over 155,000 vehicles by 2025, Polestar is confronted with the challenge of a slowdown in EV adoption in both the US and Europe. Notably, both Volvo Car and Polestar fall under the ownership of China's Geely. Following the tariff hikes, Volvo Car had also decided to postpone shipments of its popular fully electric EX30 model from China to the US.
Polestar is scheduled to disclose its second-quarter earnings on August 29, following a $232 million operating loss in the preceding three months until March. Amidst these trials, the production shift to the US showcases Polestar's determination to navigate through industry challenges and enhance its global presence.