Volvo Cars, the Swedish automaker owned by China's Geely Holding, reported a challenging second quarter,with basic earnings per share of SEK -2.53 ($-0.24), a stark contrast to SEK 1.79 ($0.17) in Q2 2024.
The company, trading under PNK:VLVLY, is known for its commitment to safety and innovation but faces intense competition from global automakers like BMW and Mercedes-Benz. Q2 revenue declined to SEK 93.5 billion from SEK 101.5 billion in Q2 2024, reflecting a tough automotive market exacerbated by U.S. trade tariffs.
Operating profit (EBIT) recorded a loss of SEK 10.0 billion, down significantly from a profit of SEK 8.0 billion in Q2 2024, resulting in an EBIT margin of -10.6% compared to 7.9% last year.This included items affecting comparability totaling SEK 12.9 billion, comprising an SEK 11.4 billion impairment charge and a SEK 1.4 billion restructuring charge.
Excluding these items, EBIT was SEK 2.9 billion, with an EBIT margin of 3.1%. To address tariff-related pressures, Volvo plans to adapt its U.S. strategy by adding production of its best-selling XC60 sports utility vehicle at its Ridgeville plant. This move aims to mitigate the impact of tariffs and supportfinancial recovery. Electrified vehicle sales accounted for 44% of total sales in Q2, down from 48% in 2024, with fully electric vehicles comprising 21% compared to 26% last year. Despite these challenges, Volvo continues to navigate acompetitive landscape, balancing innovation with economic headwinds.
