Volvo Cars has reported one of the most bruising financial years in its modern history. The company has suffered a collapse in earnings, a stinging share price crash, and mounting doubts about its electric future.
Navigating a worsening global auto market has been particularly difficult, according to its CEO, but the failing EX90 also took a serious bite out of profits.
Volvo has veered into rough terrain. The Swedish carmaker, still majority-owned by China’s Geely, has reported a net loss of 4 billion Swedish kronor (€360 million) for 2025.
A steep drop in sales, eroded profit margins, and a failed flagship SUV are the main culprits for the sluggish performance. The company’s shares tumbled 22.5% on the Stockholm stock exchange.
Late and buggy arrival
The company’s troubles are extensive and interlinked. A global slowdown in car demand, the end of electric vehicle subsidies in the United States, and the White House’s imposition of import tariffs have all contributed to the year’s financial pain.
Volvo builds the EX90 (and Polestar 3) in Charleston, but interest in electric vehicles has waned. To the regret of CEO Hakan Samuelsson, who has repeatedly stated in interviews that the US market makes an exemplary case for electric mobility, as most owners make use of a driver’s lane, which facilitates charging infrastructure.
But the core of the crisis comes from that very EX90: Volvo’s much-anticipated electric SUV, its first software-defined vehicle, arrived late and buggy. The vehicle’s software problems forced the company to write down 11.4 billion kronor (1 billion euro) on the platform it was built on, dragging the brand’s earnings deep into the red. The EX90 fiasco has left deep scars.
Down 7%
To address the bugs and problems, Volvo had to rework the software architecture entirely, even retrofitting models that were already on the road. At the presentation of the all-new EX60, Technology Officer Anders Bell affirmed that the issues are now under control with the evolved Hugin Core system, a thorough rework of the EX90 stack.
Sales slid as well. Volvo sold 710,000 vehicles in 2025, down 7% from the previous year. The company’s full-year revenue shrank by 11% to 357 billion kronor (€32 billion), while its operating profit almost vanished, plummeting 98% to just 0.3 billion kronor.
Samuelsson, never shy of a candid remark, admitted that 2026 would not bring immediate relief. “Fierce price competition, persistent tariffs, weak consumer sentiment, and unclear regulatory signals make for another difficult year,” he said. Samuelsson’s ad interim stint at the helm of the company (Geely is currently scouting for a successor) seems to be clouded by dreary economics.
Cost-cutting measures
The company has responded with a second round of cost-cutting measures. Having already shed 3,000 jobs last year, Volvo will now aim to trim a further 5 billion kronor (€450 million), targeting both variable and indirect costs.
Management reassures that no new layoffs are currently planned, although hiring freezes and “natural attrition” are expected to reduce the workforce further.
Volvo is now pinning its hopes on that recently unveiled EX60. Production will begin in the second half of 2026 in Torslanda, Sweden, and the company expects to sell over 40,000 units before the year is out.
A modest figure, but one that could help start rebuilding confidence. Also, the EX30, which has tumbled in European sales charts, needs to rediscover its sales momentum.
