Polestar, the Swedish electric vehicle brand backed by Volvo and China’s Geely, has begun manufacturing its Polestar 4 model in Busan, South Korea, for export to the United States — a strategic shift aimed at avoiding U.S. tariffs on Chinese-made EVs and reinforcing its global supply chain.
CEO Michael Lohscheller, speaking to Korean media in Seoul, called the Busan plant “a critical strategic base” for Polestar, describing it as a bridge between Asian production capacity and growing North American demand. “It starts with North America,” Lohscheller said, “but this site could eventually serve other markets as well, depending on vehicle quality and operational efficiency.”
The Busan facility — operated by Renault Korea, a subsidiary of the French automaker — began pilot production of the Polestar 4 in the second half of 2025. To convert the plant for EV assembly, Renault Korea halted internal combustion vehicle operations for five weeks earlier this year and installed 68 new systems tailored for electric manufacturing.
While Lohscheller acknowledged that the U.S. tariff environment played a role in the decision, he said the ultimate choice was driven by the Busan plant’s production capabilities. “Tariffs are part of the equation,” he said, “but the broader focus is on quality and scale.”
The move reflects a growing trend among EV manufacturers to localize or diversify production to sidestep trade barriers and reduce exposure to geopolitical risk. Under the Inflation Reduction Act (IRA), EVs assembled outside of North America generally do not qualify for consumer tax credits, but manufacturers are increasingly prioritizing tariff avoidance and regional flexibility over direct IRA compliance in early-stage models.
Lohscheller did not confirm whether Polestar plans to sell Busan-assembled vehicles in the Korean market but suggested that could be considered later. “Nothing’s been decided yet, but future opportunities may arise,” he said.
Polestar has seen rapid growth in South Korea, with 2,513 units sold from January through October — up 484% year-over-year. The Polestar 4, a coupe-style electric SUV launched in August 2024, accounted for more than 2,100 of those sales. The brand plans to build on this momentum by introducing two higher-end models next year: the full-size Polestar 3 SUV and the Polestar 5 grand tourer.
“These two models sit above the Polestar 4 in terms of both pricing and performance,” Lohscheller said. “They’ll help strengthen the brand not just in Korea, but across global markets.”
As for further investment in Korea, Lohscheller said the company would evaluate next steps based on the performance of the North American launch. “We’ll consider expansion after we confirm our success in the U.S.,” he said.
