Volvo Cars’ affordable made-in-China EV to land on US shores in summer

A made-in-China electric vehicle (EV) will hit United States dealers this summer, offering power and efficiency similar to the Tesla Model Y, the world’s best-selling EV, but for about US$8,000 less.

The EX30 from Volvo Cars, the Swedish luxury brand owned by China’s Geely, foreshadows the fierce competitive threat US carmakers could face from Chinese EV manufacturers that have surged far ahead of global rivals, especially on affordability.

The US$35,000 window sticker of Volvo’s compact sport utility vehicle hits a sweet spot in the US market, where most buyers cannot afford most EVs. The competitive price reflects an unusual combination of Geely’s Chinaspecific

cost advantages and Volvo’s ability to skirt US tariffs on Chinese cars because it also has US manufacturing operations, according to interviews with four sources familiar with Volvo and Geely strategy and several US trade policy experts.

Chinese EV makers can undercut global competitors largely because of the nation’s domination of battery minerals mining and refining, as well as its long-standing commitment to EV development, including heavy government subsidies.

In addition, Geely has slashed manufacturing costs by merging supply chains and sharing platforms and parts with Volvo and other Geely brands, according to two senior Geely managers, who spoke on condition of anonymity.

Despite its aggressive price, Volvo is targeting hefty profit margins on the EX30 of between 15 and 20 per cent globally, said a third Geely source.

The EX30 will be among only a handful of China-made cars sold in the US, none of them from Chinese brands.