Volvo Cars shares tumbled 19.5% on Thursday morning to SEK 23.76, putting the Geely-backed automaker on track for its worst trading day on record, after the release of the fourth quarter results.
As reported by EV on Wednesday, the company led by Hakan Samuelsson reported its January sales results, combining them with the last two months of 2025.
When extracting the data of January alone, global sales represented a new low since January 2022 — 47 months ago.
Volvo disclosed on Thursday that its fourth-quarter operating income halved (51.1%) to SEK 1.9 billion and the company swung to a net loss.
“While the results reflect a challenging external environment, the company realised a positive free cash flow of SEK 8.8 billion for the quarter, thanks to the successful execution of its SEK 18 billion cost and cash action plan,” Volvo said in a statement.
The automaker had previously reported that retail sales fell 3.0% to 195,700 units while wholesale volumes dropped 8.0% to 191,200 vehicles.
Fully electric models represented 24.0% of Q4 sales, up from the 21.0% registered in the final three months of 2024.
Revenue declined 15.8% to SEK 94.4 billion from SEK 112.1 billion a year earlier.
Gross margin narrowed to 15.8% from 17.1%. EBITDA dropped 26.4% to SEK 7.8 billion, compressing the EBITDA margin to 8.3% from 9.5%.
Net income turned negative at SEK –0.4 billion, down from SEK 2.3 billion in the year-ago quarter.
Cash flow from operations fell 39.5% to SEK 15.9 billion while free cash flow came in at SEK 8.8 billion, down 35.3% from SEK 13.6 billion.
CEO Håkan Samuelsson, who replaced Jim Rowan last year, attributed the results to EU-US import tariffs, the removal of US EV incentives, and pricing pressure across the industry.
The company cut 3,000 positions and executed an SEK 18 billion cost and cash action plan.
For 2026, Volvo Cars said it aims to return to volume growth on a full-year basis and generate free cash flows “clearly better” than in 2025, when full-year free cash flow totalled SEK 2.4 billion.
Full-Year 2025
For the full year, Volvo Cars sold 710,042 vehicles globally, a 7.0% decline from the record 763,389 units delivered in 2024.
Sales of fully electric vehicles fell 13.0% to 151,830 units. Plug-in hybrids declined 3.0% to 171,464 units.
Electrified vehicles — BEVs and PHEVs combined — accounted for 49.0% of Q4 retail sales, up from 47.0% a year earlier.
Volvo Cars withdrew financial guidance for 2025 and 2026 last October, citing tariff uncertainty.
The Action Plan
Samuelsson said the company completed its SEK 18 billion cost and cash action plan. The programme eliminated 3,000 positions, lowered indirect and variable costs, and extracted supply-chain synergies through closer collaboration with Geely.
“We slimmed down our organisation and removed 3,000 positions, lowered indirect and variable costs, realised supply chain and other synergies through closer collaboration with Geely,” Samuelsson said.
“Our actions in 2025 have set us on a path to return to volume growth and improved cash flows,” the CEO added.
Volvo Cars’ long-term target is an EBIT margin above 8.0%. The company has not provided specific 2026 guidance.
