Volvo Cars reports first operating loss since 2021 IPO

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favorite tales on this weekly publication.Volvo Vehicles has reported its first working loss since its 2021 inventory market itemizing in Stockholm as larger US tariffs and restructuring prices damage its profitability. The Swedish group, owned by China’s Geely, reported on Thursday an working lack of SKr10bn ($1bn) for the April to June quarter, in contrast with a revenue of SKr8bn a 12 months earlier and a mean analyst estimate of a revenue of SKr2.3bn, in accordance with S&P Capital IQ. Income additionally declined 8 per cent to SKr 93.5bn as retail gross sales declined in markets together with Europe and China.“Demand stays below strain from the macroeconomic atmosphere, tariff-related uncertainties and harder competitors,” mentioned chief government Håkan Samuelsson in an announcement. “This all continues to place strain on volumes and profitability for us, in addition to for your entire automotive sector.”The outcomes from Volvo Vehicles kick off what analysts count on to be a difficult earnings season for the automotive trade as corporations grapple with the fallout of US President Donald Trump’s commerce struggle. Earlier within the week, the corporate warned of a one-off cost of SKr11.4bn and mentioned it had been unable to promote its new ES90 — which is inbuilt China — profitably within the US due to Trump’s 25 per cent tariff on imports of foreign-made automobiles.Along with its excessive publicity to tariffs, Volvo Vehicles has struggled with launch delays and software program points with its flagship EX90 sport utility car.Excluding the one-off cost, nevertheless, Bernstein analyst Harry Martin famous that the corporate’s outcomes have been higher than anticipated because it offered extra emissions credit within the second quarter than in the entire of 2024. Rival carmakers lagging behind in gross sales of electrical automobiles have purchased credit from Volvo Vehicles to fulfill the EU’s powerful emissions rules. To deal with the deteriorating enterprise atmosphere, the corporate has introduced 3,000 job cuts globally to save lots of prices. Additionally it is growing manufacturing in South Carolina to offset the tariffs and revealed on Wednesday that it might begin producing its XC60 mid-size SUV within the US from late 2026.