Volvo Cars will also manufacture its upcoming pure electric EX30 model in the EU at its Ghent manufacturing facility in Belgium alongside the initial Chinese production line, according to the Geely-owned Swedish company.
This is highly significant as this indicates the first tangible reaction to the ongoing EU's anti-subsidy investigations into EU imports of battery electric vehicles (BEVs) from China, which also impacts European brands manufacturing and exporting to Europe, although Volvo points out that the decision to manufacture the EX30 in Europe was taken prior to the EU investigation commencing.
The baby EX30 model is based on Geely's promising all-electric SEA platform that comes in two versions (SEA 1 and SEA 2), similar to Volkswagen Group's MEB/PPE strategy, and is using similar production techniques to Tesla with aluminium mega presses for larger SEA models with higher volumes, although the EX30 is manufactured in a traditional process.
The gross margin for Volvo's entry-level model will be 15-20% putting it as ICE parity at the higher end of that corridor.
Other exposed Western OEMs could well replicate this significant announcement from the Scando-Sino company, such as BMW Group and Renault Group.
Renault Group announced this week that its top-selling BEV model, the Dacia Spring, which is manufactured solely in China and exported to Europe, falls foul of a change in French subsidy rules and will likely miss benefiting from French state-backed purchase subsidies in the future, just at a time when Stellantis rivals are bringing a European manufactured B-segment model, the Citroën ë-C3 to market for under €24,000 which drops to below €20,000 when a lower range battery will soon be added.
That is before subsidies! It is unclear if Geely could also shift the Smart #1 and Zeekr X models, both based on the same SEA architecture to Volvo's facility in Belgium also.
More in-depth reporting in the full study published each month. The study now also features an in-depth look at the Chinese OEMs as their European expansion slowly begins. Are Chinese OEMs really a threat to the established European OEMs and what does the outlook look like?
May also interest you: French OEMs most vulnerable to Chinese incursion? Click here for the story
*Western Europe 18 Markets: EU Member States prior to the 2004 enlargement plus EFTA markets Norway, Switzerland, Iceland, plus UK