GHENT — The past and the future of the automobile roll side-by-side on a conveyor belt in this factory hall. Up front is the chassis of a combustion engine model, just behind it, one for an electric car. At first glance, they are hard to tell apart. Apart from the brake discs and a few cables, there isn’t much of the car assembled yet. But one has a bare exhaust pipe sticking out from the heavy engine block: it’s clearly the combustion version. The electric model, by contrast, has a large open space where the engine would be.
“That’s what makes our factory special,” says Benjamin Van Landuyt, head of final assembly here in the Belgian city of Ghent, Volvo’s second-largest plant in Europe. “We build all models on the same line.” And now the EX30 is joining the lineup.
The EX30 is Volvo’s top-selling electric vehicle. It has only been on the market for a little over a year, but by 2024 it ranked third among the best-selling electric cars in Europe, behind Tesla. That makes it the most successful electric model from any European brand to date, beating out VW, Audi, BMW, and the rest of the German carmakers, many of whom are currently struggling with falling sales and a creeping sense of existential crisis.
So what are the Swedes doing differently?
Volvo has long been an international pioneer on hybrid cars. And since 2010, the company has been owned by Chinese auto group Geely. The brand that once stood for European automobile craftsmanship, blending Scandinavian design with high safety standards, is now an example of a functioning global partnership. It has always been a car for families, and also for architects or psychologists who like the understatement vibe, budgets permitting.
That the new EX30 is currently being built in the northeastern Chinese city of Zhangjiakou might seem at odds with this image. Volvo’s headquarters are still in Gothenburg, in Sweden’s southwest, where the brand also operates its largest factory and where the designers and engineers who shape its models are based. But the Chinese owners have played a key role in the company’s recent success.
The Swedish-Chinese brand shows just how complex the global car business has become, and what challenges companies face if they want to succeed in different regions of the world, especially now that a wave of new tariffs is reshaping global trade. To understand what this means in practice, it’s best to start in the heart of Europe.
New EU tariffs sped up the shift
From Brussels, it takes about an hour’s drive toward the coast to reach Ghent, a medieval student town with canals, cathedrals, and fortress walls. Just outside the city, right on the city port, a sprawling 600,000 square meter plant now finds itself at the center of a global trade dispute, one being played out on the relatively compact frame of the EX30.
Walking through the car factory, what stands out immediately is how few people are visible along the production line. In the body shop, robots perform a precise ballet, their mechanical arms whirring and hissing as they screw and weld the car bodies together in a matter of seconds. For now, all this is still in test mode for the EX30.
“The robots are still being fine-tuned,” says Marnix Vincke, who is in charge of body production. In several areas of the factory, Chinese technicians are stationed with their laptops, adjusting machines and training European coworkers. Plans are mapped out on whiteboards with notes in Chinese characters.
“We managed to complete the relocation in just over a year,” says Vincke. Mass production of the EX30 is due to start in April.
Since last November, Volvo has had to pay around 19% of the car’s value in customs duties.
Originally, the move to Belgium had been planned for next year. The idea had always been to eventually produce the car in Europe, since most buyers are there. But when the European Union introduced new tariffs on electric cars made in China, the timeline had to be pushed forward dramatically. Since last November, Volvo has had to pay around 19% of the car’s value in customs duties for each vehicle it imports to the EU. That is enough to put a serious dent in profits.
This is a clear example of how tariff policies can shape the global auto market. In that case, it is not Donald Trump and the United States behind the trade barriers, but the EU Commission in nearby Brussels. Its goal is to keep Chinese electric vehicles from undercutting European competitors by selling at artificially low prices. It argues that state subsidies give Chinese firms an unfair edge. Volvo had also benefited from cheaper production costs in Zhangjiakou, which helped it offer the EX30 at a competitive price.
Where to build depends on where you sell
The person best placed to explain the factory’s new role is Stefan Fesser, the plant’s manager. A seasoned automotive executive trained at Volkswagen, he wears a blue jacket with orange reflective stripes even in his office. Out his window, several wind turbines tower over the factory grounds. Inside, all eyes are on the switch to the new model.
Last year, about 100,000 EX30s were sold, with around 80% of them going to European customers. This year, 30,000 units are to be built in Ghent. “The car should be built where we sell it,” says Fesser. But can the company keep costs as low in Belgium as in China?
Fesser is not worried. The plant already turns out other models profitably. Its flexibility is a major advantage: If the electric model doesn’t sell as hoped, the line can easily shift back to building more combustion engine cars.
Compared to other manufacturers, Volvo has a high share of electric vehicles in its lineup. Of the roughly 760,000 cars it sold in 2024, nearly a quarter were battery powered. By contrast, Volkswagen’s share was under 10%, and BMW’s was 13.5%.
Still, what impact Donald Trump’s tariff threats might have remains uncertain. The U.S. market, of course, also matters for Volvo.
The key to the EX30’s success was likely its price. At 39,000 euros for the base model, it is more expensive than some mass-market competitors, but still below the premium offerings from Audi, BMW, or Mercedes.
Sweet spot
That puts the EX30 in what analysts call the sweet spot, where performance and value meet. Buyers in this segment could probably stretch for a top-tier German model but are happy with Volvo’s reputation and specs. The same goes for the company’s larger hybrid SUVs, which have also sold well and are a common sight on German streets.
“This year will be a lot tougher than last,” says Matthias Schmidt, an independent automotive analyst. “So far, Volvo has mostly competed against the second tier.” Other carmakers held back on electric models, since they made little profit and were not yet under regulatory pressure to boost their share. That is changing now.
Volvo has made the most of its Chinese partnership.
Still, says Schmidt, there is no denying that the EX30 has struck a chord. “Volvo has made the most of its Chinese partnership,” he says. That shows up in lots of small details in both design and production, all of which help cut costs. “Take the window controls, for instance — they are all in the center console rather than in each door, which makes assembly easier.” Volvo also benefits from Geely when it comes to batteries and software.
But this cross-border setup is now facing new hurdles due to global trade policy. In Ghent, Volvo has just built a new hall where batteries for the EX30 will be assembled.
The key components, the battery cells, still come from China, supplied by Geely-owned firm Vremt. If Volvo were to import the full battery pack from China, it would have to pay tariffs on the entire vehicle. That penalty can be avoided only if most of the car is assembled within the EU. And so, step by step, Volvo is becoming a little more European again.
