Volvo registers good Q3 results but warns for ‘cold winter’

Despite good Q3 sales results, Volvo is warning of a ‘cold winter’ in sales for the last quarter of this year and even deep into 2025. Meanwhile, the sales of electrified vehicles almost reach half of the total sales, and pure electric sales represent one-quarter of these total sales.

Volvo Cars reported a core operating profit (EBIT) of SEK 5.7 billion (€0.5 billion), excluding joint ventures and associates, for the third quarter of 2024, compared to SEK 6.1 billion (€0,536 billion) for the same period in 2023.

Gross margins came in at 20.5% for the third quarter, broadly in line with the company’s underlying operational gross margins for the first half of 2024. Revenues for the period amounted to SEK 93 billion (€8.18 billion), and the core EBIT margin landed at 6.2 %. Free cash flow was around flat. (-0.4 billion SEK or €35.2 million).

Warnings

Already in September, Volvo Cars said that its aim is to outgrow the premium car market and generate a core EBIT margin of 7-8% as well as strong free cash flows from 2026 onwards. Before, the company counted on double digit growth figures, even up to 15%.

However, Volvo admits that achieving these ambitions will not be straightforward since the weakness in the market has recently accelerated, a fact also echoed in revised industry forecasts for 2024 and 2025 by third-party analysts. Overall industry demand continues to soften and is now affecting the premium segment, says Volvo.

“Our journey towards 2026 will not be linear, as our industry is facing an increasingly volatile environment,” says Jim Rowan, CEO for Volvo Cars. “Macroeconomic headwinds are intensifying, as is geopolitical complexity. Despite these challenges we demonstrated resilience during the third quarter of 2024, which is reflected in our overall financial performance,” he added.

Volvo still foresees a negative cashflow for 2025. It says that it is investing in new technologies, infrastructure and cars to ensure that it becomes a leader in next-generation mobility. Volvo Cars expects these planned investments to peak during the 2024-25 period. After this phase it plans to start generating strong free cash flows from 2026 onwards.

EX30 is best-seller

Volvo’s smallest EV, the EX30, is a best-seller. It’s the best-selling EV in Europe after the Tesla Model Y and Model 3. But its success will not be able to compensate for the sales regress of all the other models. The sales growth of the last quarters was almost entirely due to this EX30.

After announcing that Volvo Cars wouldn’t be fully electric by 2030, the company now also claims that it is continuing to invest in its hybrid cars, exemplified by the updated, ready-for-a-new-era version of the iconic XC90 plug-in hybrid SUV.

“By refreshing these and other hybrid models, Volvo Cars maintains a balanced product portfolio for the current marketplace. All this will allow it to outgrow the premium car market and take market share,” the press release states. At the same time, Volvo Cars now has five fully electric cars on the road, and five more in development.

Ghent

In view of the recent decision on augmenting the import tariffs for EVs made in China, Volvo is accelerating its aim to produce the EX30 also in its Ghent plant. It plans to start building the EX30 in Ghent during the first half of 2025, with volumes ramping up in the second half.​

However, CEO Rowan confirmed that it has always be the aim to produce the car also in Europe. Even with the former import tariff of 10% and the reduced logistic costs, Volvo Cars was already able to compensate for the higher labor costs. Addional import tariffs make this decision more obvious.

Volvo Cars is looking at both investments as well as fixed and variable costs to lower its cost structure and free up cash. The company expects the car industry to remain under pressure. Hence it is doubling down on actions to tackle these external challenges, “to build an even more resilient company and further reinforce operational efficiencies”.

“We cannot control the current geopolitical uncertainties and economic headwinds,” Jim Rowan concludes. “But we can navigate them with speed, purpose, and a clear focus. Our focus is more than ever on preserving cash while creating value, for our shareholders, customers and employees.”

And the CEO remains confident: “We have proven before that we can handle challenges, and we will handle them again. Business is not a game of perfection, it is a game of progress. And despite current challenges, Volvo Cars is making progress. This is shown in our results, our technology, our talent, and ultimately our cars.”