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Volvo Cars Reports Q2 Losses Amid Ongoing Industry Challenges; Cost Turnaround Plan on Track
ByAinvest
Saturday, Jul 19, 2025 8:40 am ET1min read
Volvo Cars reported a Q2 loss of Skr10.0bn ($1.02bn), with revenues falling to Skr93.5bn from Skr101.5bn YoY. The company's Skr18bn cost and cash turnaround plan is on track, with full effects anticipated in 2026. Volvo Cars is focusing on driving sales, including the EX30 and 90 Series electric vehicles, and will "refresh" its plug-in hybrid offerings.
Volvo Cars, a subsidiary of Geely, has reported a significant loss for the second quarter (Q2) of 2025, with a group operating profit (EBIT) down by Skr10.0bn ($1.02bn) compared to Skr8.0bn in Q2 2024. The company's revenue fell to Skr93.5bn from Skr101.5bn reported in the same period of the previous year, reflecting ongoing challenges within the automotive industry [1].Despite the loss, Volvo Cars stated that its Skr18bn ($1.84bn) cost and cash turnaround plan is progressing as expected, with full effects anticipated in 2026. The Q2 EBIT margin dropped from 7.9% to -10.6%, but excluding items affecting comparability, the EBIT was Skr2.9bn, with an EBIT margin of 3.1% [1].
The impairment charge of Skr11.4bn was attributed to the adjustment of financial assumptions for the EX90 and ES90 platform, import tariffs, and delays for the EX90. Additionally, a one-time restructuring cost of Skr1.4bn was linked to a decrease of 3,000 headcounts [1].
Retail sales also experienced a decline, with 181,600 cars sold in Q2, a 12% decrease from the same period last year. The company is focusing on driving sales, including the EX30 and the 90 Series electric vehicles, and will "refresh" its plug-in hybrid (PHEV) offerings, starting with the all-new XC70 extended-range PHEV, set to launch in China in Q3 [1].
Volvo Cars CEO and president Håkan Samuelsson noted that demand remains under pressure from the macroeconomic environment, tariff-related uncertainties, and tougher competition. However, he stated that the company's turnaround actions are starting to show results, with a clear improvement in free cash flow compared to Q1 and a slightly higher EBIT margin excluding items affecting comparability [1].
References:
[1] https://finance.yahoo.com/news/volvo-cars-says-turnaround-plan-110915360.html
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