To avoid geopolitical struggles and consolidate its position in Europe, Swedish electric vehicle brand says it will produce the upcoming Polestar 7 in Europe.

The new all-electric compact SUV will be manufactured through a contract with a partner, replicating its strategy in the US, China and South Korea. Polestar shares production lines at Volvo Cars and Geely factories.

Volvo Cars will start producing its best-seller EX30 compact SUV at its Ghent factory in Belgium in 2025. The move boosts its global production capacity, but primarily circumvents a 100% tariff in the US and avoids extra duties in the EU on China-made imports. The new Polestar 7, for which further details will be released later this year, may be produced at Ghent.

“I think it’s fair to say we have a very intelligent manufacturing strategy, manufacture locally, for the local markets,” says ceo Michael Lohscheller. “Tariffs are a challenge we have to work through, and we want to really manufacture locally, and not only for the tariff situation, but also in terms of optimising our cost.”

He reinforces that the decision to localise production in Europe, “where the majority of the sales will be, is a decision which makes a lot of sense, not only from a tariff point of view, but also from a cost point of view.”

The Polestar 7 will target the “world’s fastest growing and most profitable premium segment,” the ceo adds.

Boosting its product line-up, the carmaker also plans to launch the Polestar 5 in the second half of this year. The performance 4-seat grand-tourer is based on a bonded-aluminium developed in-house. It’s also the first Polestar BEV to use 800-volt technology, Kallanish notes.

The vehicle is set to be manufactured in China, though further details including a timeline for first deliveries are yet to be disclosed.

When asked how the company planned to avoid the US ban on China-linked connected vehicles and its supply chain, Lohscheller said the company would “work out a solution” as the US remains an extremely important market for the company.  

Polestar held a webcast and Q&A session to introduce its new business plan and address investors concerns. The company announced it will make “significant changes” to improve its operational, commercial and financial performance.