The Volvo has been an instant hit in Europe and should be well received in the US as well.
Thanks to a tariff refund law that dates back to the late 1700s, the company may qualify for a refund of that 27.5% tariff, according to US trade law experts and a source familiar with Volvo’s tariff avoidance strategy.
The refund law applies to companies with manufacturing operations in the US. Volvo manufactures cars in South Carolina and exports some of them to other countries. Asked about tariff refunds, a Volvo spokesperson said the company pays all legally required duties on cars and parts but did not specifically address what refunds it receives, if any.
Volvo can also take advantage of an IRS interpretation of the Inflation Reduction Act to qualify for the $7500 federal rebate/tax credit for electric cars. According to the IRS, leased electric cars qualify as commercial vehicles and are therefore eligible for the full $7,500 subsidy with no China content restrictions. That could bring a leased EX30’s effective price to $27,500 — a compelling offer for a five-seater electric SUV with the Volvo name on it. Volvo dealers are fully prepared to exploit the leasing exemption. Lance Morgan told Reuters more than half of his customers who buy currently available Volvo EVs initially lease them to qualify for the US tax credit, then immediately buy out the lease.
Chinese Geely owns Volvo. Their strategy is merge supply chains and bring Volvo quality at Geely cost.
Geely and Volvo have created a series of shared platforms that allow Volvo and other Geely brands to share batteries, motors, gears, and electric power management inverters, all of which are high cost EV components that are cheaper in high volumes.