Volvo Cars reported an operating result of SEK -10.0 billion for the second quarter of 2025, a figure skewed by significant one-off charges. When adjusted for those exceptional items, however, the company posted a core operating profit of SEK 2.9 billion, signaling that its SEK 18 billion turnaround plan is beginning to gain traction.
The reported loss was primarily driven by an SEK 11.4 billion non-cash impairment tied to revised financial assumptions for the EX90 and ES90 electric vehicle platforms, as well as SEK 1.4 billion in restructuring costs related to the ongoing reduction of 3,000 global positions. Without these items affecting comparability, Volvo’s underlying EBIT margin stood at 3.1%.
Retail sales fell by 12% year-over-year to 181,600 units, and revenues totaled SEK 93.5 billion. Yet despite the dip in volume, CEO Håkan Samuelsson remained upbeat:
“The market continued to be challenging in Q2,” he said. “However, our turnaround actions are starting to show results. In a market with headwinds, we made a clear improvement of free cash flow versus Q1, and our EBIT margin, excluding exceptional items, was slightly higher.”
Turning Point in Volvo’s Transformation
Earlier this year, Volvo launched a sweeping SEK 18 billion cost and cash turnaround plan, now visibly underway. The strategy revolves around three core pillars: profitability, electrification, and regionalisation.
On the profitability front, job cuts and spending reductions are already being implemented, with 1,100 employees having left the company. Efforts to slash material costs include deeper collaboration with Geely Group on procurement and co-developing models for the Chinese market. At the same time, Volvo has slowed its investment pace and reduced working capital demands to boost cash flow.
These efforts are setting the stage for sustainable future profitability, supported by advanced manufacturing techniques such as mega-casting, cell-to-body battery integration, and in-house e-motor development.
EV Acceleration: EX60 and ES90 Lead the Charge
Volvo’s future hinges on electrification, and that strategy remains intact. Development of the born-electric EX60, a key entry into the premium midsize SUV segment, is on track. It will be the first model built on Volvo’s next-gen EV platform — designed for lower cost and better performance.
The ES90 all-electric sedan will arrive this autumn, targeting premium buyers with a zero-emissions offering. Meanwhile, the EX90 — following software improvements — is now fully market-ready and manufactured to meet the high standards of Volvo’s customer base.
Recognizing the transitional role of plug-in hybrid vehicles (PHEVs), Volvo is also preparing to launch the XC70, its first extended-range PHEV, with production starting in Q3. This model is expected to perform strongly in China and other markets where charging infrastructure remains limited.
Going Regional: Adapting to a Shifting Global Landscape
With globalization under strain, Volvo is leaning into regionalisation. It is decentralizing governance, starting with its China and Americas operations, to allow faster responses to local market dynamics.
Volvo is also localizing production to mitigate tariffs and supply chain challenges. The XC60 will now be assembled in Charleston, USA, while in Europe, Volvo is building out its Kosice plant in Slovakia, which will produce the upcoming Polestar 7 and a new Volvo model yet to be revealed.
Looking Ahead: Positioned for Recovery
While macroeconomic conditions remain tough, Volvo’s proactive cost and product strategies are already showing early promise. The EX30, now made in Ghent to avoid tariff exposure, is ramping up sales, while the refreshed 90 Series and new models like the EX60, ES90, and XC70 are expected to drive growth.
“When market sentiment improves, Volvo Cars will be well-positioned for profitable growth,” said Samuelsson. “With a future-proof product line-up and a leaner, more efficient organisation, we’re confident in the path ahead.”
Despite the headline figure, the second quarter represents a turning point for Volvo Cars — a moment when restructuring pain starts giving way to operational gains. If momentum continues, 2026 may mark the beginning of a new, electric-powered chapter in the company’s storied history.
Source: Volvo
