On the Dash:
- Volvo Cars posted a SEK 5.6 billion ($565 million) operating loss as China revenue fell.
- The automaker will cut about 2,500 jobs and trim SEK 5 billion ($504 million) in costs.
- The company is fast-tracking plug-in hybrids and will build the XC60 in Charleston in early 2027.
Volvo Cars reported a third-quarter operating loss of SEK 5.6 billion ($565 million) and announced a structural reduction of about 2,500 jobs globally. Shares fell almost 30% on Friday to record lows, Reuters reported.
Weak performance in China, tariff pressure in the U.S. and negative raw material developments weighed on the result. Volvo also plans to cut an additional SEK 5 billion ($504 million) in indirect spend and variable costs.
Volvo posts loss as China revenue falls
Operating income fell to a loss of SEK 5.6 billion, down from a profit of SEK 6.4 billion ($645 million) a year earlier. Revenue was SEK 66.9 billion ($6.74 billion), down about 23% from SEK 86.4 billion ($8.71 billion).
Excluding joint ventures, associates and items affecting comparability, EBIT was a loss of SEK 3.7 billion ($373 million), compared with a profit of SEK 5.8 billion ($585 million). Citi analysts said consensus was for a loss of SEK 724 million ($73 million), Reuters reported. Free cash flow was negative SEK 8.9 billion ($897 million), compared with negative SEK 4.3 billion ($433 million).
Revenue in China fell by almost 50% amid intense competition from Chinese brands and pricing pressure. Volvo scrapped its full-year guidance for sales volume and cash flow earlier this month, according to Reuters. The company said it would prioritize margins over market share in China rather than join a price war with domestic rivals.
In the U.S., tariffs and the removal of consumer incentives for electrified cars pressured margins. A SEK 1.1 billion ($111 million) negative revaluation of CAFE credits, tied to U.S. legislative changes, added to the hit.
Volvo cuts 2,500 jobs ahead of a CEO handoff
Volvo Cars will cut about 2,500 jobs globally, with about 2,000 of the reductions in Sweden. The company will use ending consultant contracts, natural attrition and targeted exit packages.
The cuts add to 3,000 job reductions announced earlier and affect about 6% of Volvo’s workforce, Reuters said. CEO Håkan Samuelsson told Reuters the company should complete the cuts by mid-2027. He did not rule out further measures.
Volvo also aims to cut an additional SEK 5 billion in indirect spend and variable costs, on top of earlier cost programs. The company expects indirect spend to be almost 25% lower by the end of 2027 than in 2024. Investment is about 30% lower than in 2024.
Klaus Zellmer, the former Skoda boss, will succeed Samuelsson next year. Samuelsson returned from retirement in 2025 on a two-year contract.
What Volvo dealers should watch
The EX60 has more than 50,000 orders in Europe, and Volvo expects it to be among its most profitable models. Ramp-up is taking longer than planned because of new industrial technology. Built volumes are steadily improving.
In the U.S., Volvo is fast-tracking long-range plug-in hybrid versions of the XC90 and XC60. Volvo will localize XC60 production in Charleston in the first quarter of 2027. According to the release, tariffs and the loss of electrified-vehicle incentives are ongoing pressures on Volvo retailers in the U.S.
