By Zaheer Kachwala

(Reuters) -Swedish electric-vehicle maker Polestar plans to move more manufacturing to Europe as U.S. tariffs and the global trade war spell trouble for the automotive industry, CEO Michael Lohscheller said on Thursday.

It also reported a 76% jump in first-quarter sales as discounts and offers helped offset stiff competition and an uncertain economic outlook.

The company, which manufactures its Polestar 2 mid-sized sedan and Polestar 4 coupe SUV in China, is the latest automaker to flag a hit from American import tariffs that threaten to push up costs for companies and upend global supply chains.

"If big tariff increases are happening, they have implications for sure, and not only for us, but for the entire industry," Lohscheller said in an interview.

"Localization is the best way forward, right, and not only for the U.S. in general, also we want to produce future products here in Europe. So that's the best way forward."

The remarks come a day after U.S. President Donald Trump announced a 90-day pause on many of his new reciprocal tariffs, but increased levies on key trade partner China to 125%, leaving markets concerned about the outlook for the global economy.

Polestar has a manufacturing presence in the U.S., in South Carolina, where it makes the Polestar 3 crossover SUV. But it plans to export the Polestar 4 to the country from a South Korean facility where production will begin in the second half, exposing the company to tariff impacts.

Lohscheller said the company was making preparations in response to the 25% reciprocal tariff Trump slapped on South Korea, without offering more details.

It has already stopped taking orders for the China-made Polestar 2 in the U.S.

After previously delaying its international expansion plans, Polestar will go to more Eastern European markets next year and then Brazil, Lohscheller said.

STRONG QUARTER

Polestar's first-quarter sales surge was partly helped by offers that targeted disgruntled Tesla owners in the U.S. with discounts of up to $20,000 towards a lease of its Polestar 3 vehicle.

Around half of its March results were a product of the Tesla incentives, the company's U.S. head of sales, Jordan Hofmann, told Reuters.

Polestar sold around 12,304 vehicles in the quarter, compared with 6,975 vehicles a year ago.

It expects to publish its full-year results at the end of the month. Polestar has previously faced delays over having to restate financial statements from earlier years due to errors.

(Reporting by Zaheer Kachwala in Bengaluru and Marie Mannes in Stockholm; Editing by Devika Syamnath)