Volvo Cars released on Thursday its second quarter earnings results, reporting its first operating loss for the April-June period — the first time it has happened since 2021, when the brand went public.
Volvo’s operating loss in the second quarter was SEK 10.0 billion ($1.04 billion), compared to positive income of SEK 1.9 billion ($194.9 million) in the first quarter.
According to the company, the low earnings before interest of taxes (EBIT) were due to an impairment of SEK 11.4 billion ($1.2 billion) and a restructuring charge of SEK 1.4 billion.
Volvo had warned earlier this week that it would record a “one-off non-cash impairment charge of SEK 11.4 billion for the second quarter of 2025.”
A year ago, Volvo had registered a EBIT of SEK 8 billion ($820.7 million).
By then, the EBIT margin was 7.9%. This year, the company reported a -10.6% margin in the second quarter — also down from the 2.2% registered in the first quarter.
Excluding items affecting comparability, the EBIT for the second quarter stood at SEK 2.9 billion ($297.5 million), with a margin of 3.1%.
The revenue fell year over year to SEK 93.5 billion ($9.68 billion). It was 7.9% lower when compared to the same period a year ago, despite being up from SEK 82.9 billion ($8.5 billion) in the first quarter.
Earnings per share (EPS) also dropped to SEK -2.53 ($-0.26), a decline of 241.3% year over year — from SEK 1.79 ($0.18). From January to March, the EPS was SEK 0.40 ($0.04).
Håkan Samuelsson, President and CEO of Volvo Cars, said “demand remains under pressure from the macroeconomic environment, tariff-related uncertainties and tougher competition.”
However, according to Samuelsson, the company’s “turnaround actions are starting to show results.”
In a second quarter market with headwinds, we made a clear improvement of free cash flow versus the first quarter,” the CEO stated, adding that the “EBIT margin excluding items affecting comparability was slightly higher.”
Earlier this year, Volvo launched a SEK 18 billion ($1.8 billion) “cost and cash turnaround plan,” and is “confident about more positive effects from the programme” from 2026.
Regarding profitability, the company announced in late May the reduction of 3,000 positions globally — about 15% of its workforce.
“Together with spending cuts this will lower its indirect cost base and establish a leaner and more efficient organisation,” Volvo stated.
The global layoffs mostly concern administrative and strategic departments, primarily office-based positions in Sweden.
Earlier this month, local media outlet Jieman News reported that the company started laying off workers in China as part of the same plan.
Just days after beginning layoffs in China, Automotive News also reported that roughly 60 jobs were cut in Volvo’s US headquarters, in New Jersey.
According to the automaker, as of the end of June, “about 1,100 people have already left Volvo Cars.”
The company announced in early May that “given external developments and increased uncertainties”, it is “no longer providing financial guidance for 2025 and 2026.”
The Sweden-based automaker intends to “complete the structural changes during the autumn of 2025,” as it is “firm on its ambition of becoming a fully electric car company.”
Last week, Volvo announced it delivered 181,561 vehicles in the second quarter, up 5.4% from the previous quarter, but down 11.6% from the same period a year ago.
Fully electric registrations reached 37,762 units, representing 20.8% of the total 181,561 vehicles sold.
In the first half of the year, BEV registrations from Volvo accounted for 70,211 units out of 353,780 — about 19.8%. From January 1 to June 30, for each five cars the company sold, one was fully electric.
The company further intends to reduce costs with “more synergies within the Geely group, by collaborating on procurement.”
In the US, the automaker will be sharing its South Carolina plant with Polestar. Volvo Cars aims to lower the impact of US tariffs by introducing local assembly of its best-selling XC60 in its Charleston plant.
In Europe, the new Polestar 7 will also be produced in the new Kosice plant under construction in Slovakia, following a “yet-to-be-announced next-generation Volvo model.”
In June, Volvo teased the fully electric version of its best-seller, the EX60 — set to be unveiled in “early 2026.”
Late last month, Volvo was spotted testing a camouflaged electric sedan on public roads in Gothenburg, according to a picture obtained by EV.
While the company has not commented on the vehicle’s identity, the model is expected to adopt its 800-volt electrical architecture, in line with the direction set by the recently unveiled ES90.
