Swedish electric vehicle (EV) manufacturer Polestar has initiated production of its flagship Polestar 3 SUV on US soil, a strategic move to circumvent looming tariffs and solidify its foothold in the burgeoning American EV market. The company’s decision comes amid growing tensions between the US and China, with increasing import duties threatening to dampen the profitability of EVs produced in China.
Previously, Polestar, a subsidiary of Chinese automotive giant Geely, manufactured its vehicles in China and exported them globally. However, the escalating trade war and the prospect of hefty tariffs on Chinese-made cars spurred the company to accelerate its plans for domestic production. By producing the Polestar 3 in the US, the automaker can avoid these tariffs and potentially benefit from consumer incentives offered to domestically produced EVs.
Polestar Selects South Carolina for U.S. Production Hub, Aiming to Strengthen Market Presence
The choice of South Carolina as the production hub is strategic. The state has emerged as a significant center for automotive manufacturing, offering a skilled workforce, robust infrastructure, and a favorable business environment. Additionally, Volvo, another Geely-owned brand, already operates a successful assembly plant in the state, providing a familiar ecosystem for Polestar.
“The decision to produce the Polestar 3 in the US is a crucial step in our growth strategy,” said Thomas Ingenlath, CEO of Polestar. “It not only allows us to avoid potential tariffs but also strengthens our connection with US consumers by offering a locally produced product. We believe that the Polestar 3, built in America, will resonate with the American market.”
The Polestar 3 is a pivotal model for the company. Positioned as a premium electric SUV, it competes directly with established luxury brands like Tesla, Audi, and BMW. By producing it domestically, Polestar aims to capture a larger share of the rapidly expanding US EV market, which is expected to experience significant growth in the coming years.
Polestar Joins Industry Shift to U.S. Manufacturing, Eyes Global Expansion Amid EV Boom
Moreover, the decision to manufacture in the US aligns with broader industry trends. Several other automakers, both traditional and electric, have announced plans to increase domestic production in response to changing market dynamics and government policies. The shift towards localized manufacturing is also driven by a desire to reduce supply chain vulnerabilities and shorten delivery times.
While the production of the Polestar 3 in the US is a significant milestone, the company has not ruled out expanding its manufacturing footprint to other regions. Polestar is reportedly considering South Korea as a potential production base for future models, further diversifying its supply chain and mitigating risks associated with geopolitical tensions.
As the automotive industry undergoes a rapid transformation towards electrification, Polestar’s strategic move to establish a US production base demonstrates the company’s commitment to long-term growth and market leadership. By combining Swedish design and engineering with American manufacturing, Polestar aims to carve out a distinctive niche in the competitive EV landscape.
