Polestar to make new SUV in Europe from 2028

Polestar to make new SUV in Europe from 2028

Reuters — 2025-07-03

Automotive Industry

Polestar said on Thursday it would make its Polestar 7 SUV model at a Volvo Cars factory in Slovakia, as the EV maker shifts more production from China and tries to cut its exposure to heavy European and U.S. tariffs.

Polestar said the two Swedish companies, both controlled by China's Geely (GEELY.UL) and its owner Li Shufu, had signed a memorandum of understanding and the new model would launch in 2028.

"Polestar is taking the next step in diversifying its contract manufacturing footprint by expanding it to Europe," the company said.

Volvo's Kosice factory in Slovakia is scheduled to start production in 2026, with an expected annual capacity of 250,000 cars.

Polestar, which has yet to make a profit, faces tariffs of 28.8% for the cars it brings into Europe and more than 100% for any it imports into the United States.

The European Union imposed tariffs on Chinese-made EVs last year because of what it describes as unfair subsidies from the Chinese government. Beijing refutes this criticism.

Tariffs have impacted Polestar more than most European automakers because the majority of its cars are produced in China, either by Volvo Cars or Geely.

The automaker now produces some Polestar 3 SUVs in the United States at a Volvo Cars plant in South Carolina.

Earlier this year, the company stopped taking new orders from U.S. customers for the Polestar 2, which is still made in China.

The automaker will also export the Polestar 4 to the United States from a South Korean plant, where production is set to begin in the second half of the year.

Earlier this year, Polestar said it would take longer to become profitable and delayed its expansion of sales to additional countries.