Volvo Cars shares plunged as much as 32% to a record low in Stockholm on Friday after the Geely-controlled carmaker swung to a third-quarter operating loss, cut about 2,500 more jobs and added SEK 5 billion ($500 million) to its cost-savings program.
The B shares fell to SEK 9.60 within the first hour of trading, the lowest since Volvo Cars listed in October 2021, and were down 27.1% at SEK 10.29 at 10:20 a.m. local time, against a previous close of SEK 14.12.
Around 28 million shares had changed hands by then, almost five times the average daily volume of 5.8 million.
The stock is on course for its worst day since the listing, beyond the 22.5% fall on February 5 that followed fourth-quarter results.
It has lost about 66% this year, from SEK 30.70 at the end of 2025, and about 72% from its 52-week high of SEK 36.54 on November 12, 2025. It trades about 81% below the IPO price of SEK 53.
Volvo Cars is now valued at about SEK 30.5 billion ($3.1 billion). Geely Sweden Holdings owns 78.65% of the shares.
A Quarter in the Red
Revenue fell 22.6% to SEK 66.9 billion ($6.7 billion) in the July to September quarter, from SEK 86.4 billion a year earlier.
Operating income was a loss of SEK 5.6 billion ($560 million), compared with a profit of SEK 6.4 billion a year earlier. The EBIT margin was negative 8.4%, against positive 7.4%.
Excluding joint ventures, associates and items affecting comparability, operating income was a loss of SEK 3.7 billion ($370 million), a margin of negative 5.6% compared with 6.7%.
Net income was a loss of SEK 5.7 billion ($570 million), against a profit of SEK 4.5 billion, and the gross margin narrowed to 13.0% from 20.4%, the interim report showed.
Earnings per share were negative SEK 1.63, against positive SEK 1.75.
Free cash flow was negative SEK 8.9 billion ($900 million), more than double the SEK 4.3 billion outflow a year earlier. That brings the outflow for the first nine months to SEK 24.1 billion ($2.4 billion), after negative SEK 10.0 billion in the first quarter and negative SEK 5.2 billion in the second.
The result included a negative SEK 1.1 billion revaluation of CAFE credits in the US, higher raw material costs and a SEK 0.9 billion charge from recognizing losses at affiliate Polestar for the second quarter.
Cash and cash equivalents fell to SEK 32.3 billion ($3.3 billion) at the end of September from SEK 57.6 billion at the end of 2025. Net cash shrank to SEK 1.0 billion ($100 million) from SEK 26.9 billion.
Total liquidity stood at SEK 55 billion ($5.5 billion), Chief Financial Officer Fredrik Hansson said on the earnings call.
Deeper Cuts
“The third quarter of 2026 was very disappointing,” Håkan Samuelsson, President and Chief Executive Officer, wrote in the report. He said “half our business was not contributing to profitability” because of the US and China, and called Europe “the sole positive contributor to our operational performance.”
“We continue to operate in a very tough environment with strong external challenges: de-globalisation, hypercompetition and climate change,” Samuelsson said in the results statement.
“However, in the short term, with severely challenged volumes, we need to reinforce our turnaround plan with additional decisive actions, lowering our break-even point and improving cash flows to make us more resilient,” he said.
The company will cut about 2,500 jobs, around 2,000 of them in Sweden, as part of the additional SEK 5 billion in savings. Indirect spending is set to be almost 25% below 2024 levels by the end of 2027, and capital expenditure about 30% lower than in 2024.
Volvo expects about SEK 600 million ($60 million) in restructuring costs, with a provision to be booked in the fourth quarter, according to the report.
Production will be concentrated at five plants, and Volvo Cars said its factories in Chengdu, China, and Ghent, Belgium, are exploring multi-brand assembly with Geely.
The new round comes on top of the SEK 18 billion ($1.8 billion) cost and cash plan launched in April 2025, under which Volvo announced about 3,000 job cuts, mostly office roles, a month later.
Sales Slump Outside Europe
The quarter’s sales had already been published on October 2, when the company withdrew its 2026 outlook for volume and cash flow and said it would give no new short-term guidance.
Retail sales fell 11% to about 141,300 cars, the interim report showed, slightly below the 141,609 the company published on October 2. The report does not explain the gap.
Wholesales, the cars shipped to dealers, fell 19% to 130,800 as Volvo reduced dealer inventory.
Retail sales in Greater China fell 41% to 19,900, and revenue there dropped to SEK 7.5 billion from SEK 14.1 billion, a fall of almost half. Chief Commercial Officer Erik Severinson told analysts the Chinese market had shrunk by about 20%.
US retail sales fell 9% to 23,800, and US revenue dropped by about a third to SEK 9.7 billion from SEK 14.5 billion, hit by tariffs and the end of federal EV incentives.
Europe was the only growing region, with retail sales up 4% to 75,400. Revenue there still fell 15% to SEK 38.5 billion from SEK 45.3 billion.
The XC60, Volvo’s best seller, fell 32% to 36,100 units, while the EX30 rose 29% to 23,300. Over the first nine months, retail sales fell 10% to about 460,000.
Fully electric cars made up 32% of global sales, up from 22%, and 45% in Europe. Electrified models, including plug-in hybrids, reached 53%.
“The market downturn in China showed no signs of easing,” Severinson said when the sales figures were released.
EX60 Ramp Slower Than Planned
The new EX60 electric SUV has collected more than 50,000 orders in Europe, but production at Torslanda, Sweden, has ramped up more slowly than planned because of its new cell-to-body battery assembly, Volvo said.
Only about 1,300 EX60s were sold in the third quarter, according to the report. Severinson said about 5,000 had been built and that the battery line would reach its planned pace over the course of next year.
Volvo Cars repeated that it plans 13 new models by 2030, first set out at its September 17 strategy update. Three will be revealed in 2027, one for Europe and two specifically for China, and a further global electric model will start deliveries after the summer of 2027.
In China, two of six Geely-based models are due in the middle of next year, and the company is merging its sales and headquarters offices in Jiading, Shanghai.
In the US, where Volvo Cars was cleared under connected-vehicle rules that barred Polestar, the company split its market into four regions, fast-tracked long-range plug-in hybrid versions of the XC90 and XC60 and will build the XC60 in Charleston, South Carolina, from early 2027. Production there is due to start “sometime in January,” executives said on the call.
No Guidance
Volvo Cars again gave no outlook for the fourth quarter or the full year. Hansson said only that “seasonally Q4 is stronger.”
The company kept its long-term goal of an 8% EBIT margin, which it set without a timeframe in November 2025.
In July, the company had promised “significantly stronger sales during the second half” and free cash flow at about break-even for the year, a target that would have required an inflow of more than SEK 15 billion in the second half.
The one-year analyst target estimate compiled by Yahoo Finance stood at SEK 15.79, about 53% above Friday’s trading price.
Polestar, in which Volvo Cars holds a stake, reported third-quarter sales up 1% earlier this month. Price Target, EV‘s sister publication that tracks Wall Street analyst ratings and price targets on automotive and tech stocks, last logged Cantor Fitzgerald reiterating an Underweight rating on Polestar in May.
Samuelsson is due to hand over to Škoda Auto chief Klaus Zellmer no later than October 1, 2027.
