Volvo published its first quarter’s financial earnings on Tuesday, reporting a revenue of SEK 82.9 billion ($8.56 billion) — a 11.8% decline from SEK 93.9 billion ($9.70 billion) year over year.
The company’s earnings per share (EPS) were SEK 0.40 ($0.04), a third of the 1.12 SEK ($0.12) in the first quarter of 2024.
The group’s operating income (EBIT) was SEK 1.9 billion ($197 million), with the brand’s wholesales dropping “as part of a planned inventory reduction” during the last quarter of 2024.
The brand, owned by China’s Geely Holding Group, said in a statement that “given external developments and increased uncertainties”, it is “no longer providing financial guidance for 2025 and 2026.”
Volvo plans to “protect profitability” and to “offset external headwinds” with an accelerated cost and cash action plan of SEK 18 billion ($1.86 billion), from which effects are expected next year.
The automaker stated that it “aims to continue in that direction with the right cars, a competitive cost base and increased resilience, and will continue to build a stronger, more efficient and more valuable Volvo Cars.”
Chief executive Håkan Samuelsson — who took over the role earlier this month after Jim Rowan stepped down — told CNBC on Tuesday that “volume drop,” “price competition” and “new players in the electric segment” are “influencing the prices generally.”
“On top of that you have the turbulence now with additional tariffs,” Samuelsson stated, adding that “all of that makes it very difficult to predict the future.”
Tariffs Impact
Commenting on the tariff impact, the chief executive said, “We see long-term, we need, of course, to come back to some kind of trade deal with the U.S. Otherwise, this is of course going to be very difficult for the business in the U.S.”
As Donald Trump imposed the 25% tariff on all imported vehicles and auto parts, Volvo planned production shifts to U.S. factories in an effort to avoid the impact.
Earlier this month at the company’s annual general meeting, the CEO had stated that the company is “well prepared in China and in Europe,” but needed “to be better in the U.S. to get around the import tariffs.”
According to the statement released together with the earnings results on Tuesday, “the company will start by focusing on the U.S and China markets, as priorities,” as it is “undertaking a strategic restructuring of its operations in the U.S. and has created a new region, called Americas.”
Volvo intends to “sharpen the product line-up it needs for growth” in the U.S. and to promote a “better use” of “its existing manufacturing footprint there in the coming years – producing more cars where they are sold.”
The efficiency at Volvo’s South Carolina factory was mentioned by Samuelsson with the CEO saying that Volvo is looking into putting “another car into that factory,” which has to be a “best-seller for the U.S. market.”
Q1 Sales
Volvo sold 172,219 cars worldwide in the first quarter, a 6% decline year over year. Nearly 32,500 of these were battery electric vehicles — with a 19% market share.
New energy vehicles (NEV), which include hybrid and fully electric models, represented 43% of the market (up nearly 5% from the same period last year).
Volvo launched its first fully electric car, the ES90, in early March. In Germany, the sedan is priced from €71,990 ($82,000).
Volvo had a goal of selling only battery electric vehicles by 2030, becoming one of the first automakers to promise a fully electric portfolio by the end of the decade.
Last September, however, the company abandoned that target, deciding to “adjust its electrification ambitions due to changing market conditions and customer demands.”
The carmaker “aims for 90 to 100% of its global sales volume by 2030 to consist of electrified cars, meaning a mix of both fully electric and plug-in hybrid models.”
The brand reiterated its most recent target by stating that “as Volvo Cars accelerates towards full electrification, its premium plug-in hybrids provide a pragmatic bridge for customers not yet ready to switch.”
