By Deji Osas
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Volvo Cars Reports Significant Q2 Loss Amid EV Woes, Tariffs, and Restructuring Efforts
Volvo Cars has reported a substantial financial setback for the second quarter of 2025, slipping into the red as challenges in its electric vehicle (EV) transition, new U.S. tariffs, and internal cost restructuring took a heavy toll.
The Swedish automaker, which is majority-owned by China’s Geely, posted a net loss of 8.1 billion kronor (approximately $830 million)—a stark reversal from the 5.7 billion kronor profit it recorded during the same period in 2024. The plunge was primarily attributed to an 11.4 billion kronor impairment charge tied to its next-generation electric models, the EX90 SUV and ES90 sedan, both of which have faced delays and ballooning development costs. New tariffs imposed by the U.S. on Chinese-linked EV imports have further impacted the profitability of these vehicles in one of Volvo’s key international markets.
“This quarter reflects the realities of a tougher global landscape,” said CEO Håkan Samuelsson. “We are facing pressure from a weakening global economy, geopolitical uncertainties—including trade barriers—and an increasingly crowded EV market.”
In addition to the EV write-downs, Volvo incurred a 1.4 billion kronor restructuring charge, following its May announcement to slash 3,000 jobs globally as part of a broader 18-billion-kronor cost-saving initiative. The company is aiming to realign its operations in response to shifting market dynamics and rising production expenses, especially those linked to electric vehicle manufacturing.
Excluding one-time charges, Volvo’s adjusted operating profit stood at 2.9 billion kronor, significantly down from 8.0 billion kronor in the same quarter last year. Car sales volume also dropped by 12%, reflecting softer demand and supply-side limitations. Revenue declined 8% year-over-year, landing at 93.5 billion kronor, although this was still ahead of analysts’ expectations of 88.2 billion, according to Bloomberg consensus data.
Despite the grim headline figures, Volvo’s stock surged more than 7% at market open on the Stockholm stock exchange—an indication that investors may be reassured by the company’s proactive restructuring and adaptation strategies.
Volvo’s struggles are emblematic of wider tensions in the global automotive market. The shift toward electric vehicles is proving more expensive and logistically complex than many automakers anticipated. At the same time, growing protectionism and regional trade disputes—such as the recently enacted 25% U.S. tariff on Chinese-manufactured EVs—have complicated international strategies for globally integrated carmakers.
In a move to circumvent those tariffs, Volvo revealed plans to start manufacturing its popular XC60 SUV in the United States starting in 2026, shifting production closer to its largest non-European market and reducing exposure to import duties.
The company also announced that it will no longer issue financial forecasts for 2025 and 2026, citing heightened external risks and economic unpredictability that make long-term projections increasingly unreliable.
As Volvo accelerates its pivot toward electrification while navigating an uncertain economic environment, analysts say its ability to regionalize production and streamline costs will be critical to its recovery in the coming quarters.
