Volvo Cars Q2 results: full speed ahead in transformation with a solid business performance


  • Q2 revenue was SEK 102.2 bn (SEK 71.3 bn in Q2 2022)
  • Q2 EBIT (excluding JVs and associates) was SEK 6.4 bn (SEK 4.6 bn in Q2 2022)
  • Q2 EBIT was SEK 5.0 bn (SEK 10.8 bn in Q2 2022)
  • Q2 EBIT margin, excluding JVs and associates and without non-recurring items, was 7.2 per cent
  • Q2 EBIT margin (excluding JVs and associates) was 6.3 per cent (6.5 per cent in Q2 2022)
  • Q2 EBIT margin was 4.9 per cent (15.1 per cent in Q2 2022)
  • Q2 basic earnings per share was SEK 1.12 (SEK 3.00 in Q2 2022)
  • Q2 fully electric car sales share at 16 per cent (7 per cent in Q2 2022)

Volvo Cars today reports a 39 per cent increase in operating profits, excluding joint ventures and associates, to SEK 6.4 bn and a corresponding EBIT margin of 6.3 per cent for the second quarter of 2023. The result came despite a SEK 0.9 bn, non-recurring item related to the redundancy programme announced in May, part of securing a more efficient and sustainable cost base for the future. Without this item, the underlying EBIT margin, excluding joint ventures and associates, was 7.2 per cent in the second quarter. This illustrates that the solid underlying performance momentum from the first three months of the year continued during this past quarter.

The companys EBIT including joint ventures and associates reached SEK 5 bn, which was lower compared to the corresponding period last year. This is mainly because group EBIT for the second quarter of 2022 was positively influenced by the one-time, non-recurring accounting effects of Polestars listing on the Nasdaq stock exchange in New York. The interim report for the second quarter of 2023 can be found here.

The second quarter of 2023 shows that the year is shaping up as planned, said Jim Rowan, president and chief executive. In these past three months we have continued to deliver on our ambitious transformation goals and made steady progress. At the same time, we also achieved a solid underlying business performance with increased sales and revenues. We are performing and transforming, while navigating the external challenges that have come our way.

During the quarter, the company reported a continued strong sales performance in electric cars. Sales of fully electric Volvo car models increased by 178 per cent year-on-year during the quarter and accounted for 16 per cent of its total share. The companys newly launched fully electric cars the Volvo EX90 and EX30 SUV models are not yet in production and have so far not contributed to the companys 2023 performance. Once these new cars hit the roads, they will further boost fully electric car sales towards Volvo Cars ambitious goal to sell only fully electric cars by 2030.

While it delivered a higher percentage of fully electric cars during the quarter, the companys margins on fully electric cars were impacted in this period because the lithium used in these cars was sourced when prices peaked during late 2022.

Additionally, as it introduced new model year 2024 fully electric cars with a considerably better range than existing models, Volvo Cars proactively shifted out the inventory of model year 2023 cars.

As the company enters the second half of 2023 this dynamic will change, since it will not only benefit from lower lithium prices, but also realise the effects of increased pricing on MY2024 fully electric cars. Therefore, margins on fully electric cars are expected to improve in the coming quarters.

Last month, Volvo Cars also revealed the fully electric EX30, its first ever small SUV. With this car, the company enters an important new segment and customer demographic and one that it expects to grow rapidly in the coming years. The EX30 will also boost the companys profitable growth in fully electric cars, with expected gross margins on the car in the range of 15 to 20 per cent. Both the EX30 and the larger EX90 are exciting steps into the future and clearly demonstrate Volvo Cars course going forward: premium electric cars, built on next-generation electric architectures with advanced battery and computing technology, as well as next-level passive and active safety features.

Volvo Cars continued its commercial transformation this past quarter. In June, it reached another key milestone when the United Kingdom became its first market to fully transform from a traditional wholesale business to a direct consumer model that is designed around flexibility for the customer. The knowledge it gains from the UK commercial transformation will be crucial as the company plans to make more markets fully direct in the coming years, together with its trusted retail partners. This will both improve the overall customer experience and make its commercial network more efficient, transparent and cost-effective.

In May, Volvo Cars also increased the focus on the global cost optimisation and resource efficiency initiative it launched late last year. This included a global redundancy programme including around 1,300 office-based positions in Sweden, as part of efforts to reduce costs and drive efficiencies across its global operations. The aim is to establish a more efficient and sustainable cost base for the future, by restructuring and changing ways of working in parts of the organisation, as well as focusing even more on securing the relevant skills it needs to be successful.

Q2 operating and financial performance

In terms of its operational performance during the second quarter, Volvo Cars recorded revenues of SEK 102.2 billion, an increase of 43 per cent versus the same period in 2022. It also saw a solid global sales increase of 25 per cent to 178,800 cars sold, a strong performance in electrified car sales, as well as continued premium pricing in many markets.

The sales performance was helped by improved production output in the companys factories. During the second quarter, it produced 50 per cent more cars than in the same period last year. This is a validation of the steps the company introduced to make its supply chain more resilient, such as broadening its supplier base, improving performance and delivery from its suppliers, developing direct relationships with key semi-conductor companies and foundries, and creating more transparency in the overall value chain.

Second-quarter EBIT excluding joint ventures and associates was weighed down by a non-recurring item of about SEK 0.9 billion, but still came in at SEK 6.4 billion, an increase of 39 per cent year-on-year. This cost was related to the redundancy programme that was part of the enhanced cost efficiency initiative announced in May.

Efforts to reduce the companys CO2 footprint per car also continued to progress. During the second quarter of the year, overall CO2 emissions per car were 18.8 per cent lower compared with its 2018 benchmark, supporting its mid-decade ambition of a 40 per cent CO2 reduction per car.

Looking ahead to the rest of the year

2023 remains a crucial year in Volvo Cars transformation. With more new electric cars on the way and work ongoing on a new battery plant in Sweden and its planned new electric car factory in Slovakia, the company is putting in place important building blocks for its next growth phase.

It has opened a new Tech Hub in Krakow, Poland, which will complement existing ones in Stockholm and Lund in Sweden, and Bangalore in India. These Tech Hubs and its other R&D centers will help Volvo Cars deliver on its ambition to become a leader in future mobility, by creating a global powerhouse of next generation technology. The company will also continue its commercial transformation towards more direct business and a constantly improving customer experience.

More broadly speaking, the company sees supply and demand continue to normalise in the wider market, which brings some additional pricing pressure as price levels have also started to normalise in several markets. Yet while rising interest rates in some of its largest markets put pressure on the consumer and the overall market, demand for Volvo cars continues to be healthy.

Assuming there are no further unexpected supply chain disruptions, Volvo Cars expects a solid double-digit growth in retail sales for the full year. It also expects the share of fully electric car sales to come in even higher than last years full-year share of 11 per cent.

Were staying the course and continue to make progress towards our ambition to be a leader in next-generation mobility, said Jim Rowan. The proof of a real transformation is in its execution and that is where our focus continues to be as we head into the second half of 2023.

Note to editors

Jim Rowan and chief financial officer Johan Ekdahl will host a livestream on Volvo Cars Q2 2023 results for media, investors and analysts at 09:30 CET today. The presentations will be held in English and followed by a Q&A session.

Link for livestream:

China-only link for livestream:

It will be possible to ask questions during the Q&A session following the main presentation. To participate, you can either use the chat function online to type your question or you can call in. To call in, participants need to register via the link below and will then receive the dial-in details and individual PIN.

Link to register

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Volvo Trucks Singapore Launches New Generation of Heavy-Duty Trucks with Safety and Driver in Focus

Volvo Trucks’ new generation of heavy duty trucks – the Volvo FH, FH16, FM and FMX – are now available in Singapore. These four new trucks have a strong focus on the driver environment, safety and productivity. With this new range, Volvo Trucks Singapore aim to be their customers’ best business partner by making them even more competitive and help them attract the best drivers in an increasingly tough market.

“We are very excited that our new generation of trucks will soon be reaching our valued customers in Singapore, our first market in Southeast Asia. All four truck models have been developed with a strong focus on improving the driver environment, safety and productivity of the vehicles, making them more efficient than their predecessors,” says Elisabeth Larsson, Vice-President of Volvo Trucks Southeast Asia and Japan.

These new truck models in Volvo Trucks’ range are available with many different cab models and can be optimised for a wide range of applications. The cab is often the driver’s second home as they spend long hours in the truck. In logistics transport, the trucks often serve as a mobile office, while in construction the trucks are robust, practical work tools. Therefore, visibility, comfort, ergonomics, noise level, manoeuvrability and safety were key focal points when developing all the new truck models. The truck exterior has been upgraded to reflect the new trucks’ properties and create an attractive overall design.

New cab, offering more space and improved visibility – Volvo FM and Volvo FMX
The new Volvo FM and Volvo FMX have a brand new cab, as well as many of the same instrument display functions as their larger Volvo counterparts. Their interior volume has been increased by up to one cubic meter, providing better comfort and more working room. The visibility is now even better due to larger windows, a lowered door line and new mirrors.

The steering wheel is equipped with a neck tilt function allowing the driving position to be individually adjusted to a greater extent. Cab comfort is further enhanced through reinforced insulation that helps shut out cold, heat and noise disturbance, while a sensor-controlled climate unit with a carbon filter promotes good air quality in all conditions.

All models have a new driver interface
The driver’s area now has a completely new interface for information and communication, aimed at making it easier to overview and manage different functions, creating less stress and distraction. The instrument display is fully digital, with a 12-inch screen that makes it easy for the driver to choose the information needed at any time. There is a supplementary 9-inch side display available as option for infotainment, navigation, transport information and camera monitoring. The functions can be controlled via buttons on the steering wheel, or via the touchscreen and display control panel.

Winner of Red Dot Award 2021 for outstanding design quality – Volvo FM
The distinction “Red Dot” has become established internationally as one of the most sought-after seals of quality for good design. Winning this award highlights a well-balanced and purposeful design of the Volvo FM and its ability to create business value for the truck customers and to deliver a higher level of comfort, safety, and productivity.

Enhanced safety systems to help avoid accidents
Safety has been further improved with functions such as adaptive high beam headlights in the Volvo FH and Volvo FH16. The system improves safety for all road users by automatically disabling selected segments of the LED high beam when the truck approaches oncoming traffic or another vehicle from behind.

Driving is also facilitated by an improved Adaptive Cruise Control (ACC) for speeds down to zero km/h and descent control that automatically activates the wheel brakes when extra brake force is needed to maintain constant downhill speed. The Electronically controlled Brake System (EBS), which is a prerequisite for safety features such as Collision Warning with Emergency Brake and Electronic Stability Control, now comes as standard on the new truck. Volvo Dynamic Steering, with the safety systems Lane Keeping Assist and Stability Assist, is also available as an option.

The visibility can be improved further by adding a passenger corner camera which provides a complementary view of the side of the truck on the side display.

“Drivers who handle their truck safely and efficiently are an invaluable asset to any transport company. Responsible driving behaviour can help reduce CO2 emissions and fuel costs, as well as helping reduce the risk of accidents, injury and unplanned downtime. We believe our new trucks will help drivers in Singapore work even more safely and productively,” explains Marco Bonaveglio, Market Director for Singapore.

Launched initially in Europe last year, the new heavy-duty range has received strong interest from customers, with over 12,000 trucks ordered in 2020. All four new heavy-duty trucks have been in serial production since March 2021.