On the Dash:
- Volvo Cars’ EBIT margin fell to 1.1% from 2.2% in the first quarter.
- China sales slumped 35%, driving the sharpest hit to second-quarter profitability.
- Cost cuts topped $829 million in H1, already beating the full-year target.
Volvo Cars reported second-quarter revenue of $8 billion (SEK 77.7 billion), down from $9.7 billion (SEK 93.5 billion) a year earlier, the company said in its earnings report. The prior-year figure included a $414 million (SEK 4.0 billion) one-off benefit. The company posted operating income of $83 million (SEK 0.8 billion) and an EBIT margin of 1.1%. Basic earnings per share came in at $0.04 (SEK 0.42).
The margin marks a decline from the first quarter, when Volvo Cars posted a 2.2% EBIT margin on operating income of $172 million (SEK 1.6 billion).
According to the sales report, global retail sales totaled 171,501 cars for the quarter, down 5.6% from a year earlier. While fully electric car sales made up 25% of the total, up from 21% in the second quarter of last year, electrified vehicles, which include fully electric and plug-in hybrid models, accounted for 52% of sales, up from 44%.
Free cash flow for the quarter came in at negative $539 million (negative SEK 5.2 billion), which the company attributed mainly to inventory build-up tied to the start of production of its new EX60 SUV, according to the earnings report.
The automaker said the quarter was marked by a considerable weakening of the China market, affecting both the company and the broader auto industry, along with rising global uncertainty tied to the ongoing conflict in the Middle East.
“Overall market conditions remain challenging, specifically in China, but we are encouraged by the momentum for the fully electric cars in our largest market, Europe,” Erik Severinson, Volvo Cars’ Chief Commercial Officer, said in the company’s sales report.
On costs, Volvo Cars said it delivered about $518 million (SEK 5 billion) in indirect and variable cost savings during the first half of the year, hitting its full-year target six months ahead of schedule. That comes on top of roughly $829 million (SEK 8 billion) in spending cuts the company implemented in 2025, as reported in its earnings report.
Looking to the second half, the company said it expects significantly stronger sales compared with the first half of the year as production of the EX60 ramps up. The company’s Q1 coverage noted the EX60 had just entered production in April, with orders beating expectations; that ramp is now underway heading into the back half of the year.
