Volvo was considering halting the sales of its EVs. (Photo: Business Times)

The European Union is expected to impose tariffs on China-made electric vehicles from next month.

Anticipating an imposition of tariffs on China-made electric vehicles (EVs), Volvo Car has started to shift its Chinese-made EVs to Belgium.

Majorly owned by China’s Geely, Volvo was earlier considering halting the sales of its EVs if tariffs were introduced. However, it has now resorted to another alternative, states a report by The Times citing company insiders.

While this transfer includes Volvo’s EX30 and EX90 models to Belgium, the carmaker may also move the assembly of its models bound for the UK.

In 2023, the European Commission, responsible for overseeing trade policy in the 27-nation European Union, launched an investigation to find out whether fully electric cars manufactured in China were receiving distortive subsidies. Nine months after the probe’s start, the Commission can start imposing provisional anti-subsidy.

On the other hand, China has accused the EU of trying to “suppress Chinese companies,” claiming that it will take action to safeguard its interests. According to Xinhua News Agency, the accusations of unfair competition have been dubbed unfounded.

“It is premature to speculate on the implications of what this investigation will conclude, or any potential measures,” said a Volvo spokesperson to Reuters, as quoted by Moneycontrol. The decision to build the Volvo EX30 model in Belgium, with production commencing in 2025, is to build cars where they can be sold as much as possible, the spokesperson explained further, adding that the EX90 is being built in the United States, and not in China.

Notably, a series of trade frictions between the European Union and China have reportedly led to anti-dumping probes against Beijing alongside allegations of unfair subsidies. Factors like Beijing’s close ties with Moscow after Russia invaded Ukraine have strained relations further.

European Commission Likely To Impose Tariffs From July 4

In the meantime, the Commission is expected to start levying provisional duties on Chinese-made EVs as early as July 4, states a report by the South China Morning Post. The company will be informed privately by next week about the level of duties that will be applied. “This is an ongoing investigation; we are not going to comment on it. We will be in a position to announce some provisional elements on it quite soon,” said Olof Gill, the EU’s trade spokesman, to the outlet.