Volvo Cars reported an operating income of SEK -3.7 billion, excluding joint ventures, associates and items affecting comparability, for the third quarter of 2026. The EBIT margin on the same basis was -5.6 percent.
Revenue fell to SEK 66.9 billion from SEK 86.4 billion a year earlier, and basic earnings per share were SEK -1.63. Free cash flow came in at SEK -8.9 billion. The company says the quarter reflected a further deterioration in its external environment, led by market developments in China and the US.
Europe Holds, While China and the US Weigh
Volvo Cars remains a leader in the premium fully electric segment, with a BEV sales share of 45 percent in Europe during the quarter. Conditions were far tougher elsewhere. In China, the company faced hypercompetition from new local brands and severe pricing pressure, and its revenue there fell by almost 50 percent year on year.
In the US, tariffs and the removal of consumer incentives for electrified cars continued to squeeze margins. The quarter also absorbed a SEK 1.1 billion negative revaluation of CAFE credits following US legislative changes, raw material headwinds, and a SEK 0.9 billion charge for recognising Polestar’s losses from the second quarter of 2026.
Cost Cuts Reach About 2,500 Jobs
Volvo Cars aims to take out an additional SEK 5 billion in indirect spend and variable costs, on top of earlier programmes it completed. The plan involves a structural reduction of roughly 2,500 jobs worldwide, about 2,000 of them in Sweden.
The company will achieve this by ending consultant contracts, through natural attrition and through targeted exit packages. Full effects are due by the end of 2027, when overall indirect spend will be almost 25 percent below 2024 levels. Volvo Cars is also cutting R&D costs, which it says are supported by its SPA3 and HuginCore technology foundation.
A Product Push Led by Regional Models
The company plans 13 new cars by the end of 2030, tailored to Europe, the US and China with more localised production. Three will be revealed in 2027: one for Europe and two for China.
The EX60 has drawn more than 50,000 orders in Europe, and Volvo Cars says it will become one of its most profitable models, although the ramp-up is taking longer than planned because of new production technology such as cell-to-body. A new global BEV aimed at a larger, lower-priced segment in Europe will arrive in 2027, with first customer deliveries after the summer.
In the US, the company has split the market into four regions and will fast-track long-range plug-in hybrid versions of the XC90 and XC60. It will localise XC60 production in Charleston starting in the first quarter of 2027.
In China, Volvo Cars will combine its two Shanghai offices and, with Geely, reveal and begin production of the first two of six China-tailored cars in mid-2027. Its plants will be concentrated on five dedicated Volvo sites, and the company is exploring multi-brand assembly at its Chengdu and Ghent plants with Geely. Investment has returned to levels about 30 percent below 2024.