(Reuters) – Volvo (OTC:) Automobiles has begun moving production of Chinese-made electric vehicles to Belgium in anticipation that the European Union will continue to crack down on Beijing-subsidized imports, the Times newspaper reported on Saturday.
Volvo, which is majority owned by Chinese company Geely, was considering stopping sales of Chinese-made electric vehicles heading to Europe if tariffs were imposed, the newspaper reported, citing company insiders.
However, the report added that moving production of the Volvo EX30 and EX90 models from China to Belgium is expected to negate the need for this for the company, and that the company insists that suspending sales of electric vehicles made in China is no longer being considered.
Production of some Volvo models destined for the United Kingdom could also be moved to Belgium, the Times reports.
Volvo did not immediately respond to a Reuters request for comment outside business hours.
The European Commission, which oversees trade policy in the 27-nation European Union, last year launched an investigation into whether all-electric cars made in China receive distorting subsidies and justify additional tariffs.
The subsidy investigation, officially launched on October 4, could last up to 13 months. The Commission may impose preliminary anti-subsidy duties nine months after the start of the investigation.
Relations between China and the EU have been tense due to factors including Beijing’s closer ties with Moscow following Russia’s invasion of Ukraine. The EU is seeking to reduce its dependence on the world’s second-largest economy, especially for materials and products needed for the transition to a green economy.