According to The Times, Volvo Car has begun moving the production of electric vehicles (EVs) made in China to Belgium, in anticipation of potential crackdowns by the

European Union on imports subsidized by Beijing.

The European Commission, responsible for trade policy across the 27-member European Union, initiated an investigation last year into whether fully electric cars manufactured in China were benefitting from distortive subsidies and thus necessitated additional tariffs.

Volvo, majority-owned by China's Geely, was reportedly contemplating suspending sales of Chinese-made EVs destined for Europe if tariffs were imposed, as per insiders cited by the newspaper. However, by shifting production of Volvo's EX30 and EX90 models from China to Belgium, the company can continue sales without interruption.

The report also suggests that certain Volvo models bound for the United Kingdom may also see their manufacturing relocated to Belgium.

A spokesperson for Volvo, speaking to Reuters, stated, "It is premature to speculate on the implications of what this investigation will conclude, or any potential measures." The decision to produce the EX30 in Belgium starting in 2025 aims to manufacture cars where they can be sold most effectively. The spokesperson clarified that the EX90 is manufactured in the United States, not China.

Volvo had previously announced in October its plans to increase capacity in Ghent for EX30 production from 2025, the spokesperson added.

The EU's investigation into subsidies, launched officially on October 4, can extend up to 13 months. The Commission can impose provisional anti-subsidy duties nine months after initiating the probe.

Tensions between China and the EU have been strained due to various factors, including Beijing's closer alignment with Moscow following Russia's invasion of Ukraine. The EU seeks to reduce its dependence on China, particularly for materials and products crucial for its green transition. Photo by Calreyn88, Wikimedia commons.