Volvo Performance in 2025: Financials, Sales, Top Models, and Market Trends

Financial Performance and Profitability

• Q2 2025 Revenue: SEK 93.5 billion (~$9.6 billion USD), down 7.8% compared to Q2 2024

• Operating Profit (EBIT) Q2 2025: SEK -10.0 billion, impacted by a one-off non-cash impairment charge of SEK 11.4 billion and restructuring costs of SEK 1.4 billion

• Operating Profit excluding one-off items: SEK 2.9 billion with a margin of 3.1%

• Operating Profit Margin Q2 2025: -10.6% (7.9% in Q2 2024), excluding items 3.1%

• Basic Earnings Per Share Q2 2025: SEK -2.53, down from SEK 1.79 year-over-year

• The impairment charge is related to financial adjustments for the EX90 and ES90 platforms influenced by import tariffs and delayed launch schedules

• The company’s SEK 18 billion cost and cash turnaround plan is on track, with improved free cash flow compared to Q1 2025

Vehicle Sales and Production

• Q2 2025 Retail Sales: 181,600 vehicles, down 12% year-over-year

• Total sales for the first half of 2025 were down 9% compared to H1 2024

• Electrified cars comprised 44% of sales in Q2, with fully electric vehicles accounting for 21% (down from 26% in Q2 2024)

• Production ramp-up underway for new electric models including the EX30 and EX90, while ES90 and XC70 production starts later in 2025

• New all-electric EX60 SUV set for production start in 2026

Regional and Global Sales Performance

• Tariffs, especially a 27.5% tariff on vehicles imported to the U.S. from Europe, continue to weigh on profitability and competitiveness

• The U.S. market impact prompted plans to locally produce the popular XC60 SUV at the Charleston, South Carolina plant to mitigate tariff effects

• Despite market softness and tariff-related pressures, the company remains confident in improved positioning with the new model lineup and operational efficiency gains

Profitability and Cost Factors

• Cost restructuring includes a workforce reduction of approximately 3,000 employees and lower discretionary spend

• Impairment and restructuring charges significantly affect short-term profitability but are part of the strategic turnaround

• Margins are expected to improve as turnaround measures take effect and new models ramp production

Debt and Liquidity

• Free cash flow improved significantly in Q2 compared to Q1 2025, driven by working capital improvements and reduced capital expenditures

• The company is focusing on cash generation and prudent investment to navigate the current market adversity

Best Selling Models: Overview and Highlights

Weakest Performers and Segment Challenges

• The EX90 and ES90 models saw profitability impacted by tariffs and delayed market introduction

• Competitive pressures in the electric vehicle segment, particularly from Chinese EV manufacturers

• Macroeconomic uncertainty further depresses demand and pricing power

Key Financial and Operational Metrics

Industry Outlook and Strategic Focus

• Turnaround plan focused on cost reductions, operational efficiencies, and product lineup refresh

• Production localization efforts, especially in the U.S., to mitigate tariffs and improve margins

• Continued investment in electrified vehicle technology and new model launches planned for the second half of 2025

• Expectation for gradual market recovery and profitability improvement as key initiatives take hold

Summary

Volvo Cars faced a tough Q2 2025 with declining revenue and a substantial operating loss mainly due to one-off impairment and restructuring charges linked to tariff issues and delayed new model introductions. Nonetheless, the company’s comprehensive turnaround strategy is progressing, showing early signs of improved cash flow and operational discipline. New electric vehicle production ramps and strategic actions to localize production are poised to position Volvo for a more positive outlook moving forward in 2025 amid ongoing market challenges.

Sources

• Volvo Cars Q2 2025 Financial Results Press Release

• Industry Financial Analysis and Market Commentary on Volvo Q2 2025 Performance

• Official Volvo Cars Investor Relations Reports July 2025