(Il Sole 24 Ore Radiocor) – Volvo Cars sank on the Stockholm Stock Exchange as its 2025 results fell well short of expectations, especially in the fourth quarter. The stock of the Swedish carmaker controlled by China’s Geely has plunged 25 percent. In the fourth quarter Volvo reported an operating profit (Ebit) of 1.9 billion kroner, down 51%, an adjusted operating profit of 1.8 billion (-68%), a net loss of 0.4 billion compared to net profit of 2.3 billion in the same period of 2024, and sales down 16% to 94.4 billion.
“The performance in the fourth quarter was influenced by various external factors, such as the US tariffs on imports and the negative currency effect from the strengthening of the Swedish krona. On top of this, revenues were impacted by weak demand, which put pressure on prices, and the removal of electric car incentives in the US, which negatively affected sales.” Volvo’s CEO Hakan Samuelsson, who returns to the helm of the company in April 2025, himself described the quarter’s EBIT as ‘disappointing’.
For the whole of 2025, sales decreased by 7% to 710,000 cars. Sales fell 11% to SEK 357.3 billion, affected ‘mainly by lower wholesale volumes and the unfavourable sales and pricing mix, partially offset by the increase in used car sales’. Operating profit (EBIT) was SEK 0.3bn, compared to SEK 22.3bn in 2024, under the weight of, among others, write-downs of SEK 11.1bn and restructuring costs of SEK 0.8bn. The financial year ended with a net loss of SEK 3bn, compared to a profit of SEK 15.9bn in 2024.
For the current financial year, the group expects “a difficult year for the industry, with continued price pressure in a competitive market, the effects of tariffs, regulatory uncertainties and a drop in consumer confidence”. For Volvo Cars, the first half of 2026 will also be characterised by negative cash flow effects due to a temporary increase in production of the XC90 and XC60 models at the Torslanda plant in order to meet annual demand for these models, which are “still very popular and to compensate for the start of production of the XC60,” the carmaker explains. Throughout the year, the company will continue to reduce direct and indirect costs’ by an estimated DKK 5 billion. The pace of investments ‘will move towards more sustainable levels’.
The goal for the year is to return to year-on-year volume growth and increase cash generation, with annual free cash flow significantly above that achieved in 2025 (SEK 2.4 billion). Volvo Cars also emphasises that it is focused on the implementation of its strategy, announced in November.