US political leaders on both sides of the aisle have been scrambling to keep Chinese cars out of the country. Tariffs, proposed bans on connected-vehicle software, and national security reviews have created a wall that no Chinese brand has yet crossed. But one company may already have a key inside the gate: Zhejiang Geely Holding, better known as Geely.

Geely, the Chinese parent of Volvo, Polestar, and Lotus, has quietly built a physical presence in the United States that its competitors in China do not have. Through Volvo, Geely owns a factory in South Carolina, which analysts tell CNBC is currently underutilized. It also has a network of dealerships covering all three of those brands. That combination of manufacturing capability and retail distribution is something no other Chinese automaker has achieved on American soil.

Volvo's CEO has said he would be open to making Chinese-branded cars at the South Carolina plant if the company can navigate the strict US laws that currently block most Chinese vehicles. Geely's leaders have stated they want to bring Chinese brands to the US. If Geely pulls it off, it would be considerably ahead of much of its competition.

Geely's head start

Most Chinese automakers eyeing the US, including BYD, NIO, and XPeng, have to start from scratch. They would need to build or buy a factory, establish a dealer network, and navigate a thicket of federal and state regulations that are actively getting stricter. The Inflation Reduction Act, for example, restricts tax credits for vehicles with Chinese battery components. A Biden administration rule proposed in early 2024 could effectively ban cars with certain Chinese-made software and hardware from US roads.

Geely's situation is different. It does not need to break ground on a new plant. Volvo's factory in Ridgeville, South Carolina, opened in 2018 and currently builds the S60 sedan. Analysts describe it as underutilized, meaning there is spare capacity to assemble additional models. That factory could theoretically build Chinese-branded vehicles — such as Geely-branded EVs — without the company having to spend billions on a new facility.

Volvo, Polestar, and Lotus already sell cars in the US through established dealer networks. Polestar, which Volvo co-owns with Geely, has its own retailers. Lotus has a small but growing presence. These distribution channels are already in place, a major logistical and regulatory hurdle that BYD or NIO would have to build from zero.

What Volvo's CEO said

Jim Rowan, Volvo's CEO, addressed the possibility directly in a recent interview. He said the company would be open to producing Chinese-branded vehicles at the South Carolina plant if it could comply with US law. That is a conditional statement, but it signals that Geely is at least exploring the option. Given that Geely controls Volvo, the decision ultimately rests with Geely's leadership in Hangzhou. And Geely's leaders have publicly stated their ambition to bring Chinese brands to the US market.

The CEO's openness is notable because it comes at a time when the political climate is hostile to Chinese-made cars. The assumption in Washington has been that the wall is high enough to keep out all Chinese brands. But if Geely can manufacture cars in South Carolina using Chinese designs and Chinese engineering, the wall may have a loophole big enough to drive an SUV through.

The obstacles

That does not mean it will be easy. US trade law contains provisions designed to block not just imported Chinese cars but also cars that use significant Chinese content. The CHIPS and Science Act and the Inflation Reduction Act both impose content restrictions on vehicles sold in the US. The proposed connected-vehicle rule from the Department of Commerce would bar cars with Chinese-made vehicle-to-everything components, which could include infotainment systems or telematics hardware that a Geely-branded car would likely carry.

There is also the question of public perception. Chinese brands have a trust deficit in the US, due to geopolitical tensions and concerns about data security and national security. Even if Geely builds a car in South Carolina with American workers, the brand itself is Chinese. Volvo's CEO acknowledged in his comments that navigating the laws will be a complex task.

What it would mean

If Geely succeeds, it would be a significant moment for the global auto industry. Chinese carmakers have been locked out of the US despite being world leaders in electric vehicle production and cost efficiency. BYD, for instance, sells EVs globally but cannot sell a single one in the US. Geely, through its ownership of Volvo, has a path that no competitor has.

The underutilized factory in South Carolina is a crucial asset. Automotive factories operate profitably only when they run near capacity. Volvo's plant has room to grow. Adding Geely-branded models — especially affordable EVs — could fill that capacity while giving American consumers a price-competitive option. That scenario would pressure legacy automakers like Ford and GM, which have struggled to build affordable EVs profitably.

Who else is in the race?

No other Chinese parent company has this combination of assets. BYD has considered building a plant in Mexico but faces significant uncertainty about US import rules. NIO and XPeng have no US factory plans. SAIC Motor, which owns MG, sells in Europe but not the US. Great Wall Motors has explored a US entry but pulled back. Geely's ownership of a European brand with an American factory is unique among Chinese automakers.

The bottom line

Geely is not a household name in the US. But via Volvo, it already has a factory, dealers, and a CEO willing to consider building Chinese cars on American soil. The remaining obstacles are legal and political, not logistical. If Geely can thread the needle on US trade laws, it stands to become the first Chinese carmaker to win in the US market. Its competitors are still on the outside looking in.