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People inspect the interior of the new Volvo Car AB EX30 all-electric SUV during its reveal event in Milan on June 7, 2023. (Francesca Volpi/Bloomberg News)

Volvo Cars will postpone U.S. shipments of its best-selling electric car model as it shifts production from China in the wake of tariff hikes.

The EX30 was due for delivery to U.S. customers this fall, but after the U.S. introduced a duty of more than 100% on Chinese EV imports, Volvo won’t ship until 2025. That’s when the carmaker is scheduled to start building the model at its factory in Belgium, said Bjorn Annwall, the company’s deputy CEO and chief commercial officer. "We have decided to wait with the market introduction so that we can optimize our footprint, as there are new U.S. tariffs, and the European Union may also introduce tariffs,” he said. “Our U.S. customers who had hoped to receive the car this fall will unfortunately not get it delivered until next year.”

Following the Biden administration’s measure, the European Union has notified carmakers, including Volvo’s majority owner Zhejiang Geely Holding Group, that it will impose significantly higher tariffs on battery-electric cars from China on July 4. This follows an investigation of subsidies that started last year.

Volvo started building the EX30 in Zhangjiakou, China, and will gradually increase production of the small SUV in Belgium next year. That means a 20% additional duty could be levied on EX30s imported to Europe for about a year if the EU tariffs go into force next month, Annwall said.

“If the tariffs are introduced, it will impact us, our clients and our volumes for a certain amount of time, but it’s during a transition period and only for one model, so it is manageable,” he said. “The bigger question is what happens if there is a broader global trade war.”