Polestar has launched production of its luxury SUV, the Polestar 3, at Volvo Cars’ Ridgeville, South Carolina, factory, according to a Wednesday press release.

The electric vehicle maker — owned by Geely Holding and Volvo Cars — is working to grow its manufacturing footprint ahead of expanded U.S. tariffs on electric vehicles and materials from China, home to its Chengdu factory.

In the release, Polestar CEO Thomas Ingenlath called manufacturing in the U.S. “a crucial step” for the company, adding that exporting the electric crossover to Europe will “strengthen the business on a broader scope.”

Polestar anticipates several financial benefits from U.S. manufacturing operations.

Co-production at Ridgeville facility was enabled by “significant industrial and financial synergies” stemming from the company’s ownership structure. Volvo opened the 2.3 million-square-foot plant in 2018, and it includes a body shop, paint shop, battery assembly plant, final assembly, a vehicle processing center and an office building, according to the automaker’s website.

“Polestar’s asset-light approach to development and manufacturing enables it to benefit from the competence, flexibility and scalability of its partners and major shareholders,” the company said in the release.

In June, the company made its first Polestar 3 deliveries in Sweden, Germany, Norway and the U.S. Polestar delivered 20,200 vehicles in the first half of the year, but did not specify the sales performance of each of its models.

And while the EV startup can now avoid a proposed rise in tariffs on the vehicle itself, it could still faces financial challenges when it comes to batteries. Polestar sources batteries from China-based CATL, and tariffs on batteries manufactured in China are expected to jump from 7.5% to 25%.

“As a global company headquartered in Sweden, listed on Nasdaq in New York and operating across 27 markets, we believe that free trade is essential to speed up the transition to more sustainable mobility through increased EV adoption,” a spokesperson said in an email to Automotive Dive in June.

In its earnings outlook, Polestar highlighted its momentum but cautioned of “short-term impacts” from import duties and continued pricing pressure in global EV markets. It’s working to mitigate those those issues with U.S. manufacturing, as well as the upcoming launch of Polestar 4 production in South Korea.

By: DocMemory
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