Aug 14 (Reuters) - Swedish electric-vehicle (EV) maker

Polestar moved one step further in avoiding major

tariffs imposed on Chinese-made cars on Wednesday when the

automaker said it began production of its Polestar 3 SUV in the

United States.

Steep tariffs recently imposed by U.S. and Europe on cars

made in China have prompted many automakers to speed up plans to

move parts of their production to other countries.

Polestar, majority owned by China's Geely, has been

manufacturing its vehicles in China and exporting to overseas

markets. The Polestar 3, made in Volvo's U.S. plant in South

Carolina, will be sold to customers in the U.S. and Europe.

"If you look at the bulk of volume that we will produce of

Polestar 3, of course, the majority of that volume will be here

coming out of the South Carolina factory," Chief Executive

Thomas Ingenlath told Reuters on Tuesday.

Production at the plant was expected to reach full volume in

two months, he said, but declined to disclose Polestar's

capacity at the facility. Deliveries to U.S. customers from the

plant will begin next month followed by deliveries to Europe,

Ingenlath added.

Polestar sold 3,555 Polestar 2 sedans, its first battery

powered car, in the U.S. during the first half of the year,

according to Kelley Blue Book estimates.

The company also plans to build its Polestar 4 SUV coupes at

a South Korean plant of Renault Korea, part owned by Geely, in

the second half of 2024 for Europe and the U.S. Until then,

deliveries in the U.S, expected to start later this year, will

attract tariffs.

The U.S. and South Korea production have been part of

Polestar's plan for some time to spread out where it makes its

cars.

Production in Europe has also been part of its ambition.

Ingenlath said that the company hope to partner with an

automaker to produce its cars in the region in the next three to

five years, similar to its existing partnership with Volvo and

Renault.

The transition to U.S. production comes as high interest

rates to tackle inflation have soured consumer appetite for EVs,

prompting companies, including market leader Tesla, to slash

prices and leading to job cuts and delayed production plans.

Going ahead, Polestar, which cut jobs earlier this year,

will focus on reducing the cost of materials and logistics, and

increase efficiency to reign in costs in order to push cash flow

to break even in 2025, Ingenlath said.