Polestar, the premium electric vehicle (EV) maker owned by China’s Geely and Volvo Cars, has begun its production activities of the Polestar 3 in the United States, after the production of the electric SUV (sport utility vehicle) in China started earlier in 2024.
Polestar began production of the Polestar 3 at its plant in Ridgeville, South Carolina, marking the first time the EV maker has produced on American soil.
“Manufacturing Polestar 3 in the USA is a crucial step for us. Now we offer customers in America an electric SUV that is built in America,” Polestar CEO Thomas Ingenlath said.
Founded in 2017 by Volvo and Geely, Polestar’s first product, the Polestar 1, was only available in limited quantities and has been discontinued. The Polestar 2, which began deliveries in mid-2020, is considered the brand’s first truly mass-produced model on sale, and is only built at a plant in China’s Zhejiang province.
On October 12, 2022, the Polestar 3 made its global debut. On February 27, 2024, Polestar said that production of the Polestar 3 had begun in Chengdu, Sichuan, in southwest China. With the manufacturing line now extending to the United States, the Polestar 3 has become the first Polestar model to be produced on two continents, supporting the company’s growth ambitions in North America, Europe and Asia.
By producing vehicles in the United States and China, Polestar will be able to serve North America, Europe and Asia markets more efficiently, reducing lead times and costs, the venture informed the media.
Polestar vehicles produced at the Ridgeville plant will not only be supplied to the US market, but will also be shipped to Europe. The company also plans to begin production of the Polestar 4 in South Korea by 2025.
Separately, according to a Reuters report, Ingenlath said the US plant is expected to reach full capacity in two months and will begin supplying US customers in September 2024, followed by deliveries to Europe. Polestar sold 3,555 Polestar 2 sedans in the United States in the first half of the year, Reuters said, citing Kelley Blue Book estimates.
Polestar’s production line expansion in the American mainland comes at a time when Europe and the US have imposed tariffs on EVs from China. In a May 14 statement, the US Trade Representative’s Office (USTR) announced that in 2024 the tax on Chinese EVs would rise from 25% to 100%.
The European Commission announced on July 4 the results of its preliminary ruling in its countervailing investigation against Chinese carmakers, with different carmakers facing different rates.
The Xi Jinping government, meanwhile, has filed a formal complaint to the World Trade Organisation (WTO) against the European Union (EU) regarding tariffs imposed on EVs manufactured in China. The EU’s decision to implement these tariffs has sparked discontent in Beijing, prompting the Chinese administration to launch investigations into exports of French cognac.
This Chinese retaliation has also raised concerns among analysts that the situation could escalate into a trade war with the EU, potentially causing global economic harm.
The EU has imposed provisional tariffs of up to 37.6% on EVs made in China, saying they unfairly benefit from government subsidies. China, on the other hand, maintains that its support for the industry conforms to WTO rules.
The two sides have until early November 2024 to try to resolve their differences, after which the provisional tariffs will become official. China’s Commerce Ministry has dubbed the EU tariffs a violation of WTO rules, as they undermine global cooperation on climate change.