Why Polestar shares are rising today

The Swedish-Chinese actions electric vehicle (EV) manufacturer. Polestar Automotive (PSNY 16.58%) were trading sharply higher on Friday after the company said it had begun production of a new electric SUV in the United States.

As of 11:30 a.m. ET, Polestar shares were up about 16.6% from Thursday’s closing price.

Polestar is now making its electric family-sized SUV in the US

Polestar said it has begun production of the Polestar 3, an electric luxury SUV, at a South Carolina plant owned by Volvo Cars. Polestar is a joint venture between Volvo Cars and Volvo’s parent company, the Chinese automaker Geely Automobile Holding.

A Polestar 3 built in the USA. The company is moving to produce more models outside of China in an attempt to avoid tariffs in the US and EU. Image source: Polestar.

Polestar headquarters is in Sweden. But until this week, all Polestar electric vehicles destined for the US and European markets were produced at a Geely plant in China. Polestar’s stock has fallen significantly this year on fears that tariffs in the European Union and the US will make Polestar’s electric vehicles built in China uncompetitive.

The new Polestar 3 is a three-row SUV designed with the US market in mind. Production began in China late last year. South Carolina-built Polestar 3s will be sold in both the US and Europe in an attempt to avoid high tariffs.

Polestar will build another model outside of China in 2025

Polestar reiterated plans to start building the Polestar 4, a smaller sports crossover currently built in China in South Korea, in 2025 — again, to avoid tariffs. The company also resolved a lingering compliance issue with the Securities and Exchange Commission by filing its annual Form 20-F report earlier this week.

Polestar will report its second quarter results before US markets open on Thursday, August 29.