New Delhi, Jun 10 (KNN) Major European automakers are weighing plans to move their electric vehicle (EV) production facilities out of China to neighboring countries like Indonesia and India, as well as potentially back to Europe itself.

This strategic shift comes in response to escalating trade tensions between the European Union (EU) and China.

Leading the charge is Swedish automaker Volvo, which has announced plans to relocate production of its Chinese-made EX30 and EX90 EV models to Belgium. This move aims to circumvent anticipated EU tariffs on vehicles imported from China, which could be announced as early as this week.

The EU has accused Chinese EV makers of benefiting from unfair subsidies and has launched anti-dumping investigations against China. Provisional tariffs raising import duties above the current 10% rate could take effect on July 4.

While Volvo has denied reports of the production shift to Belgium, citing existing plans to build vehicles closer to primary markets, other major automakers like BMW, Volkswagen, and Mercedes are also reportedly exploring expanding operations beyond China to protect themselves from potential tariffs.

China has reacted furiously to the EU's actions, accusing the bloc of attempting to "suppress" Chinese companies. Beijing has promised to take measures to protect its interests and has dismissed allegations of unfair competition as baseless.

The situation highlights the broader challenges facing the global automotive industry amid rising trade tensions. As the EU seeks to protect its domestic industry, China views the potential tariffs as protectionist measures, setting the stage for potential retaliation and escalating trade conflicts.

(KNN Bureau)