Volvo Car posts US$1 billion loss over impairment, tariffs

[STOCKHOLM] Volvo Car posted a US$1.03 billion operating loss in the second quarter, hit by a previously announced impairment charge over model delays and the escalating cost of tariffs.

The automaker’s retail sales plunged 12 per cent to 181,600 vehicles in the period. Volvo’s cost-cutting programme is on track, the company said on Thursday (Jul 17). 

Controlled by China’s Zhejiang Geely Holding Group, Volvo is one of the more tariff-exposed car brands. Tariffs and past development setbacks have weighed on profitability and sales of its battery-powered models, the EX90 sport utility vehicle and ES90 sedan. On Wednesday, the company announced plans to start producing its best-selling XC60 at its US plant, a sport utility vehicle previously imported from Sweden.

Volvo earlier this week warned that it would take an 11.4 billion Swedish kronor (S$1.5 billion) impairment charge over model delays and the growing cost of tariffs.

Chief executive officer Hakan Samuelsson was brought back in April by owner Li Shufu to turn around the company by aligning it more closely with the Geely group. He’s also pushing through a sweeping 18 billion-krona cost-cutting program set to affect roughly 3,000 jobs.

Earlier this month, Samuelsson said the company would delay large-scale production at its under-construction Slovakia plant to early 2027, from a previous target of 2026, to better align product launch timelines. Volvo has also agreed with sister brand Polestar to produce the upcoming Polestar 7 SUV at the same facility starting in 2028. BLOOMBERG