Volvo Car (OTCPK:VLVC.Y) Update / briefing March 26, 2026 10:00 AM ET Company ParticipantsEmil Jørgensen - CFOErik Lundkvist - Head of Investor RelationsConference Call ParticipantsHarry Martin - AnalystNikita Papaccio - AnalystStuart Pearson - AnalystNone - AnalystNone - AnalystNone - AnalystErik LundkvistGood afternoon, everybody, and welcome to Volvo Cars and our pre-close calls for Q1 2026. It's 3:00 P.M., but people are still joining, so let's give them some 30 seconds or so until we start off. Now it' ...

Core Insights - Higher-than-expected customer demand for the new EX60 midsize electric SUV has led Volvo Cars to increase production capacity at its Swedish plant [1] - The EX60 has received over 3,000 orders in Sweden within a month of its launch, significantly outpacing the entry-level EX30 compact electric SUV [2] - Volvo is prioritizing a steady ramp-up of EX60 production and is in discussions with employee unions to extend the Torslanda facility's operation during summer to meet demand [3][4] Production and Sales - The EX60 is set to compete with Volvo's best-selling plug-in hybrid XC60, which will begin production in South Carolina in 2026 [3] - Global sales for Volvo Cars decreased by 10% to 156,965 cars shipped in the three-month period compared to the same period the previous year [6] - Electric vehicle sales increased by 18%, while hybrid and internal combustion engine vehicle sales fell by 17% and 16%, respectively [6] Market Challenges - The company acknowledged that U.S. tariffs and regulatory changes negatively impacted sales from December 2025 to February 2026 [5][7] - The prolonged new year holiday period in China also contributed to the challenging market conditions [7]

每经记者｜刘曦 每经编辑｜余婷婷 中加汽车合作迎来关键一步。日前，加拿大全球事务部（Global Affairs Canada）发布进口管制公告称，2026年3月1日至8月31日期间，将按照"先到先得"原 则发放最多2.45万辆针对中国产电动车辆的进口许可，获批车辆将适用6.1%的最惠国关税税率。 此外，加拿大边境服务局2月26日发布的海关通知显示，所有从中国进口车辆除需获得进口许可外，还必须符合加拿大全部安全法规要求。 此次配额开放，标志着加拿大对华电动车关税政策的重大转向。回顾此前，自2024年10月1日起，加拿大政府对自中国进口的电动汽车加征100%的附加税， 综合税率一度升至106.1%。值得注意的是，在2024年10月附加税实施前，中国制造电动汽车对加出口已形成一定规模。 乘联分会秘书长崔东树整理的数据显示，2023年全年，中国向加拿大出口新能源乘用车为4.17万辆，同比增长751%。2024年上半年，中国向该国出口新能 源乘用车为1.32万辆，同比增长500%。 EX30 图片来源：沃尔沃官网 图片来源：加拿大政府官网 根据进口公告，加拿大针对中国产电动车的进口配额初始规模为4.9万辆，涵盖纯电动 ...

销量方面，第四季度纯电动汽车销量占比达24%（2024年第四季度为21%），电气化汽车销量占比达49%（2024年第四季度为47%）。 沃尔沃汽车表示，尽管业绩受到复杂外部环境的挑战，但得益于180亿瑞典克朗成本及现金行动计划的成功实施，该季度仍实现88亿瑞典克朗的正向自由现 金流（2024年第四季度为136亿瑞典克朗）。 第四季度业绩主要受到多项外部因素影响，包括欧美进口关税、瑞典克朗走强带来的负面汇率效应，此外，市场需求疲软导致的定价压力，以及美国取消电 动汽车激励措施，均对该季度销量产生了不利影响。 2月5日，汽车发布2025年第四季度及全年财务报告。第四季度，沃尔沃汽车营业收入为944亿瑞典克朗（2024年第四季度为1121亿瑞典克朗）；营业利润为 19亿瑞典克朗（2024年第四季度为39亿瑞典克朗）；不含可比项目的营业利润为18亿瑞典克朗（2024年第四季度为56亿瑞典克朗）。 第四季度EBIT利润率为2%（2024年第四季度为3.4%）；不含可比项目的EBIT利润率为1.9%（2024年第四季度为5%）；基本每股收益为0.43瑞典克朗 （2024年第四季度为0.84瑞典克朗）。 2026年，沃尔沃 ...

Core Insights - Volvo's global sales are projected to grow by 2% to 75,000 units by December 2025, despite a slight decline in the European market [1][3] - The overall sales for Volvo in 2025 are expected to decrease by 7% to 710,000 units, with the XC60 SUV being the best-selling model at 230,000 units [1] - Key markets for Volvo include China, the United States, the United Kingdom, Germany, and Sweden [1] Sales Performance - Sales in Europe decreased by 0.2%, while the U.S. and China saw increases of 0.8% and 1.2%, respectively [1] - The growth in sales is attributed to the rise in demand for pure electric and plug-in hybrid products [3] - The XC70 plug-in hybrid model, launched in China, is experiencing increasing sales and is planned for a later release in Europe [3]

Summary of Conference Call Industry Overview - The global macroeconomic environment remains fragile, with limited signs of improvement noted in recent data [1] - Consumer confidence in the euro area is unchanged at -14.2, indicating subdued household sentiment [1] - In the U.S., the University of Michigan's consumer sentiment index is at 51.0, significantly lower than the previous year, reflecting cautious household behavior due to cost-of-living concerns [2] - China's economic recovery is uneven, with subdued consumer confidence and increasing discount-driven order demand [2] - Chinese exports of electric vehicles are growing, intensifying competition in Europe [2] - S&P Global has revised its automotive sales volume forecast upwards, but the U.S. premium segment is expected to contract by 2.4% in 2025, Europe by 4.9%, and China by approximately 10% [3] Company-Specific Insights (Volvo Cars) - Retail sales for October and November showed a 6% volume decline, with October down 2% and November down 10% [3] - Revenue from contract manufacturing was SEK 2 billion in Q1 2025, SEK 3 billion in Q2, and SEK 3.2 billion in Q3 [4] - The stronger Swedish krona continues to pose a headwind for revenue [4] - The U.S. Section 45W ending will negatively impact PHEVs sold in the U.S. by $7,500 per car [4] - Gross margins are expected to be negatively affected by weaker volume development and U.S. tariffs introduced in Q2 [5] - Retail sales have dropped by 6% quarter-to-date, negatively impacting gross margins [5] - The EBIT margin will also be affected by negative volume and discount developments [6] - Free cash flow typically shows stronger generation in Q4, but inventory reduction seen in Q4 2024 will not repeat this year [6] Market Dynamics - Discounts for battery electric vehicles (BEVs) in the U.S. have reached around $11,000, significantly higher than normal levels [9] - Order trends for BEVs are positive year-over-year, indicating a potential recovery despite current sales declines [17] Financial Guidance and Outlook - The company does not provide specific guidance for Q4 or 2026, but aims for transparency in reporting [14][15] - The restructuring program will impact costs, with a headcount reduction expected to affect fixed employee costs from Q4 onwards [14] - Inventory dynamics are returning to normal seasonality, with some inventory build-up for specific models [17] Risks and Concerns - There are concerns regarding the balance sheet exposure towards Polestar, particularly in the event of financial difficulties [18] - The company is cautious about commenting on specific financial figures for Q4, indicating a level of uncertainty in performance [22][23] Conclusion - The overall sentiment is cautious, with a focus on managing costs and navigating a challenging macroeconomic environment while looking for signs of recovery in BEV orders and sales. The company is preparing for potential impacts from tariffs and market competition, particularly in the U.S. and European markets.

Core Viewpoint - Volvo Cars experienced a significant stock price surge of over 40%, marking its largest intraday increase since its listing, following the release of its strong Q3 earnings report that exceeded market expectations [1][3]. Financial Performance - The company reported an operating profit of 6.4 billion Swedish Krona (SEK) for Q3, surpassing analyst expectations and increasing from 5.8 billion SEK in the same period last year [3][4]. - Net profit reached 5.195 billion SEK, up from 4.21 billion SEK year-on-year, with earnings per share at 1.75 SEK compared to 1.41 SEK previously [3][4]. - Q3 revenue was 86.4 billion SEK, down from 92.78 billion SEK in the same quarter last year, while the gross margin improved from 17.7% to 24.4% [3][4]. Management Insights - CEO Håkan Samuelsson attributed the strong performance to the successful redesign of the best-selling XC60 model and cost-saving measures in collaboration with Geely [3][4]. - The management team has shifted focus from growth and market share to cash flow and profitability, which has contributed to the improved financial results [5]. Sales and Market Trends - Global retail sales for Q3 were 160,500 units, a 7% decline compared to the same period last year, but there was a slight recovery in sales in September [4]. - Cumulative sales for the first three quarters reached 514,300 units, with electric vehicle sales accounting for 227,300 units, representing a penetration rate of 44% [4]. Challenges and Future Outlook - Despite the positive earnings report, the company faces challenges such as ongoing price competition and the impact of U.S. import tariffs [6][7]. - The recent U.S.-EU trade agreement has reduced tariffs on European cars, providing a clearer policy environment for Volvo [7]. - The company anticipates that market challenges will persist in the short term, but expects to optimize its product structure with increasing sales of electric models and strong demand for hybrid vehicles [7].

Core Viewpoint - Volvo reported a significant loss in Q2 due to U.S. tariffs, marking its first quarterly loss since going public in 2021, with a loss of 10 billion Swedish Krona (approximately 7.4 billion RMB) instead of the expected profit of 2.3 billion Swedish Krona (approximately 1.69 billion RMB) [1][2] Financial Performance - The direct cause of the loss was a one-time charge of 11.4 billion Swedish Krona (approximately 8.44 billion RMB) due to a 25% tariff on foreign-made cars, which prevented the profitable ES90 model from entering the U.S. market [2] - Excluding this one-time charge, Volvo's operating profit for Q2 was 2.9 billion Swedish Krona (approximately 2.15 billion RMB), which, while significantly lower than the 8 billion Krona (approximately 5.92 billion RMB) from the same period in 2024, still slightly exceeded market expectations [2] Workforce and Cost-Cutting Measures - In response to the deteriorating business environment, Volvo announced a global layoff of 3,000 employees, representing about 15% of its white-collar workforce, with a one-time restructuring cost of 1.5 billion Swedish Krona (approximately 1.1 billion RMB) [4][5] - The layoffs will primarily affect administrative, research, and strategic departments, with 283 positions cut in China, accounting for 3.5% of its workforce in the region [4][5] Strategic Adjustments - To mitigate the impact of tariffs, Volvo plans to start producing its best-selling XC60 SUV at its South Carolina plant by the end of 2026 to avoid high import tariffs [2] - The company has initiated a cost-cutting plan totaling 18 billion Swedish Krona (approximately 13.32 billion RMB), set to be completed by 2026, and has canceled financial guidance for 2025 and 2026 [5] Market Challenges - Volvo's sales in China fell by 8% in 2024, with a 12% decline in Q1 2025, indicating significant challenges in its electric vehicle transition [6] - The company has faced criticism for its slow pace in electric vehicle development, with recent models like the EM90 and EX30 receiving poor market reception [7][8] Industry Context - Volvo's struggles reflect broader challenges in the European and Japanese automotive sectors, with analysts predicting a tough earnings season due to the ripple effects of U.S. tariffs [3] - Other major automakers, including Nissan, Volkswagen, and Ford, have also announced layoffs and cost-cutting measures, indicating a trend across the industry [5]

Core Insights - The CEO of Volvo Cars expressed optimism about future sales, anticipating an increase in the sales of flagship electric models EX30 and EX90 as production ramps up [1] Group 1 - The company is focusing on increasing production capacity to meet the expected demand for its electric vehicle lineup [1] - The flagship electric models EX30 and EX90 are central to the company's growth strategy in the electric vehicle market [1]

Core Viewpoint - Volvo is undergoing layoffs in China following a 12% decline in sales in the first quarter, reflecting challenges in its electric vehicle transition and market competition [1][2]. Group 1: Layoffs and Financial Impact - Volvo has initiated layoffs in its China operations, particularly affecting positions in the Shanghai technical research center, with compensation based on an "N+3" standard [1]. - The company plans to cut approximately 3,000 jobs globally, which represents 15% of its workforce, incurring a one-time restructuring cost of up to 15 billion Swedish Krona (approximately 1.13 billion RMB) [2]. - The layoffs are part of a strategy to streamline operations and enhance efficiency in response to competitive pressures and industry changes [2]. Group 2: Sales Performance - In the first quarter of 2025, Volvo's global sales decreased by 6% to 172,200 units, with a significant 12% drop in the Chinese market, selling only 33,300 vehicles [2]. - Despite a projected 8% increase in global sales for 2024, reaching approximately 763,400 units, the Chinese market has seen an 8.2% year-on-year decline, totaling 156,000 units [2]. Group 3: Electric Vehicle Strategy - Volvo aims for full electrification by 2030, with a revised target for electric and plug-in hybrid vehicles to account for 90% to 100% of global sales [4][5]. - The company has launched several electric models but faces strong competition from Chinese brands, impacting its market penetration [5]. - In the first quarter of this year, 43% of new vehicles sold were electrified models, with electric vehicle sales growth outpacing the industry at nearly 33% in the first two months [5].