Volvo to legally skirt tariffs to sell China-made electric vehicles

U.S. auto dealers will be offering an electric vehicle this summer that’s made in China and will sell for $8,000 less than Tesla’s Model Y.

Swedish luxury brand Volvo Cars, which is owned by China’s Greely, will begin selling its compact SUV EX30 model for a window price of $35,000, Reuters reports.

Since China dominates much of the mineral mining and refining needed to make EV batteries, and its government heavily subsidizes the industry, it can undercut global competitors.

Vehicles from China into the U.S. face a 27.5% tariff, but under a law that allows companies with factories in the U.S. to get refunds for the tariffs they pay. Volvo has a factory in South Carolina, which makes it eligible for the program.

“President Biden or his successors may need to salvage the U.S. auto industry in the future as cheap Chinese electric vehicles, which Biden’s policies are promoting and even subsidizing, could become an ‘extinction-level event’ for U.S. automakers,” according to the Institute for Energy Research.