Volvo Cars shares down 5% after company announces SEK 11.4 bln impairment charge partly due to tariffs

Volvo Cars shares down 5% after company announces SEK 11.4 bln impairment charge partly due to tariffs

Stockholm, Sweden — Volvo Cars (VOLCAR B) announced a one-off impairment charge of SEK 11.4 billion ($1.19 billion) in the second quarter, leading to a 5% drop in its share price. The charge, primarily attributed to tariffs and launch delays, reflects adjustments in expected volumes and planned lifecycle profitability for the ES90 and upcoming EX90 models [1].

The company, controlled by China's Geely Holding, is currently unable to sell its Volvo ES90 profitably in the United States due to import tariffs. This has put significant pressure on the model's profit margins in Europe as well. The impairment charge, which will impact the company's cost of sales and R&D line, is expected to reduce net income by SEK 9.0 billion in the period [2].

Volvo Cars continues to invest in its next-generation electric car architecture and software capabilities, which will underpin several upcoming high-volume programs. The company reaffirms its determination to become a fully electric car maker, positioning itself for improved scalability, profitability, and customer value [3].

The announcement comes amidst ongoing global trade tensions, with President Donald Trump's latest tariff threats impacting various industries, including automotive. While world markets remained relatively buoyant, investors are keeping a close eye on the situation [5].

Volvo Cars is scheduled to publish its second-quarter results on July 17, 2025. The company has employed approximately 42,600 full-time employees as of December 2024, with its head office and production plants located in various countries, including Sweden, Belgium, the United States, and China [4].

References:
[1] https://finance.yahoo.com/news/volvo-cars-books-1-2-150549049.html
[2] https://www.marketscreener.com/quote/stock/VOLVO-CARS-128506374/news/Volvo-Cars-books-1-billion-impairment-charge-due-to-tariffs-launch-delays-50503250/
[3] https://www.marketscreener.com/quote/stock/VOLVO-CARS-128506374/news/Volvo-Cars-announces-one-off-SEK-11-4-billion-non-cash-impairment-charge-50503150/
[4] https://news.cision.com/volvo-car-ab--publ-/r/volvo-cars-announces-one-off-sek-11-4-billion-non-cash-impairment-charge,c4206905
[5] https://finance.yahoo.com/topic/tariffs/