Volvo is open to building Chinese EVs in America, CEO says

• Volvo's CEO told BI he was open to building EVs from its Chinese parent company, Geely, at its US plant.
• Håkan Samuelsson said the decision would depend on Geely navigating strict US regulations on Chinese EVs.
• Geely's top-selling EV costs about $9,700 in China, but the company has been blocked from the US by high tariffs.

The US is missing out on cheap Chinese EVs, but Volvo is open to changing that.

In an interview on Wednesday, Volvo CEO Håkan Samuelsson told Business Insider that the Swedish brand would consider building cars from its Chinese parent company, Geely, at its factory in South Carolina.

Samuelsson cautioned that any discussions would be dependent on Geely successfully navigating the daunting regulatory environment for Chinese vehicles in the US.

"Assuming that, of course, we could discuss building cars in the plant, as we have capacity," Samuelsson said.

Chinese-developed vehicle software and hardware are effectively banned from the US under rules introduced by the Biden administration.

Geely, BYD, and China's other EV powerhouses are taking market share from Western automakers in China and Europe by offering a variety of affordable, high-tech electric vehicles.

Geely's sales have grown rapidly in recent years on the back of cut-priced EVs like its Galaxy hatchback, which starts at 68,800 yuan ($9,670) in China.

However, these companies have been effectively blocked from selling their cars in the US by tariffs of over 100%.

Geely executives said earlier this year that China's second-largest automaker, which also owns Western brands Polestar and Volvo, could announce plans to expand into the US in the next two to three years.

Building its vehicles at Volvo's plant in Charleston, South Carolina, could be one way of circumventing the sky-high tariffs on Chinese vehicles, although the restrictions on Chinese hardware and software would still be a major barrier. The factory currently produces Volvo's EX90 SUV and the Polestar 3 EV.

Last week, The Wall Street Journal reported that Geely had also held talks with Ford about a potential partnership in the US that could include the Chinese company licensing its technology to the Detroit auto giant.

Any attempt to bring Chinese EVs to the US would likely face renewed political opposition, with US auto executives warning that a wave of cheap Chinese vehicles would be devastating for the industry.

Republican Senator Bernie Moreno recently proposed a bill that would ban Chinese cars from US roads completely.

Samuelsson said that European and American automakers would come under severe pressure from insurgent Chinese EV makers as they expand beyond their home market.

The Volvo CEO told Business Insider he had recently test-driven cars from Chinese brands Xiaomi and Zeekr, and had been impressed by their advanced tech and premium feel. Samuelsson added that Western companies will have to "get help" and learn from their Chinese rivals if they are to bring down the cost of building EVs and compete.

"It will be a huge competition pressure on the old industry from the new," he said.

Samuelsson spoke to Business Insider following Volvo's first-quarter earnings, in which it reported declining revenue and profits as the Swedish automaker faces slowing EV sales in the US and fierce competition in China.