Chinese electric automaker Zeekr considers European production to evade tariffs, potentially enabling it to keep costs low for its local customers.
Zeekr looks to Europe for EV manufacturing
Zeekr is exploring the possibility of producing electric vehicles in European factories associated with its parent company, Zhejiang Geely Holding Group, Bloomberg reported.
The move is apparently part of Zeekr’s strategy to circumvent high tariff rates on China-made electric vehicles in the EU.
Geely Group President and Zeekr Chief Executive Officer Andy An clarified that the company has no plans to develop new production plants. Instead, it aims to utilize existing facilities of Geely Group or one of its European partners.
For context, Geely Group currently operates Volvo Cars AB factories in Sweden and Belgium and a London Electric Vehicle base in the United Kingdom.
“We are actively proceeding with localization work in Europe and we will make an announcement on it at the right time.”
Andy An, Geely Group President, and Zeekr Chief Executive Officer
In addition, Zeekr explores local production in other regions.
The challenge
Zeekr’s electric vehicle offerings all undergo production in China. Therefore, these models are subjected to a 19.9% provisional import duty into the EU.
For context, this high tariff rate stemmed from the anti-subsidy probe, which has accused Chinese players of benefitting from unfair state subsidies.
The EU has yet to decide whether to make the newly set provisional import tariffs final in November 2024. Notably, other countries like the United States and Turkey have also announced import tariff hikes to curb the surge of low-cost China-made EVs.
“I personally express my regret over the introduction of these policies. I think their decisions are not right. They will have a certain impact on Zeekr’s international development.”
Andy An, Geely Group President, and Zeekr Chief Executive Officer
Expansion plans
Zeekr is currently accelerating its expansion push in other regions.
In fact, its electric car rollout in key markets across the Middle East, Latin America, and Southeast Asia is on track to kick off this year.
It also aims to start selling some of its products in the Japanese and South Korean markets in 2025.
These considered, import tariffs in key markets like Europe and the US can substantially hamper Zeekr’s plans to dominate the global market. While it remains unclear if Zeekr will ever penetrate the US market, importing from Europe will undoubtedly help evade the 100% tariff on Tesla’s home turf. In addition, European production will also enable it to bypass the 19.9% provisional import duty in the region.
