Volvo Cars made an operating loss in the third quarter of 2026 as revenue fell sharply, with China and the US the main problems. The Swedish carmaker plans to cut a further SEK 5 billion in costs, which means about 2,500 jobs worldwide, and is pressing ahead with 13 new models by the end of 2030.

Volvo Cars has reported a loss for the third quarter of 2026. Its operating income was SEK -5.6 billion, compared with a profit of SEK 6.4 billion a year earlier. Revenue fell to SEK 66.9 billion from SEK 86.4 billion in Q3 2025.

Operating income excluding joint ventures, associates and items affecting comparability came to SEK -3.7 billion. That figure was SEK 5.8 billion a year ago. The matching EBIT margin was -5.6 per cent, against 6.7 per cent in Q3 2025. The company says the external environment got worse during the quarter, led by developments in China and the US.

China and the US weigh on results

The picture in China was particularly bleak. Volvo Cars says it and other established premium brands came up against intense competition from new Chinese rivals and heavy pressure on prices. Its revenue in China fell by almost 50 per cent year-on-year.

In the US, the company says tariffs and the end of consumer incentives for electrified cars continued to squeeze margins. Other factors also hurt the quarter:

  • a SEK 1.1 billion negative revaluation of CAFE credits after legislation changes in the US
  • unfavourable raw material costs
  • a SEK -0.9 billion charge from recognising Polestar’s losses for Q2 2026

Free cash flow was SEK -8.9 billion, compared with SEK -4.3 billion a year earlier. Basic earnings per share were SEK -1.63, against SEK 1.75 in Q3 2025.

Europe and electric cars hold up

Europe was the bright spot. Fully electric cars made up 45 per cent of Volvo’s sales there in Q3. Worldwide, fully electric models accounted for 32 per cent of sales, up from 22 per cent a year earlier. Electrified models, which include plug-in hybrids, made up 53 per cent, up from 46 per cent.

According to the manufacturer, the EX60 has taken more than 50,000 European orders, and Volvo expects it to be one of its most profitable models. Volvo says production is ramping up more slowly than planned because of new manufacturing technology such as cell-to-body construction, but output is steadily improving.

“We continue to operate in a very tough environment with strong external challenges: de-globalisation, hypercompetition and climate change. We are convinced that we have the right long-term strategy addressing these challenges,” says Håkan Samuelsson, president and CEO. “However, in the short term, with severely challenged volumes, we need to reinforce our turnaround plan with additional decisive actions, lowering our break-even point and improving cash flows to make us more resilient.”

SEK 5 billion in new savings

Volvo Cars plans to cut another SEK 5 billion from indirect spending and variable costs, on top of earlier cost programmes. About 2,500 jobs will go worldwide, 2,000 of them in Sweden. The company says it will do this by ending consultant contracts, not replacing staff who leave, and offering targeted exit packages.

The full savings are due by the end of 2027. By then, the company says, indirect spending will be almost 25 per cent lower than in 2024. Other planned measures include:

  • concentrating production on five dedicated Volvo plants
  • exploring multi-brand assembly with Geely at its Chengdu and Ghent plants
  • sharing more suppliers and hardware with the Geely Group
  • further cuts to R&D spending, now that the SPA3 platform and HuginCore are in place

Volvo says it has passed its peak investment period. Investment is now about 30 per cent lower than in 2024.

13 new models with a regional focus

The company is speeding up its biggest-ever product push: 13 new cars by the end of 2030, with separate line-ups for Europe, the US and China and more local production. Three of these cars will be revealed in 2027: one for Europe and two specifically for China.

The European model is Volvo’s next global electric car. It targets a large, lower-priced segment, and first customer deliveries are planned for after summer 2027. The first two of six China-specific cars will be revealed and enter production in mid-2027. They will be built in closer cooperation with Geely, using a Chinese technology stack and the latest driver-assistance (ADAS) systems.

In the US, Volvo has split the market into four regions. It is bringing forward production of long-range plug-in hybrid versions of the XC90 and XC60. XC60 production moves to Charleston in Q1 2027, and a second, all-new car with several powertrain options is due to be built locally by the end of the decade. In China, the company is merging its two Shanghai offices by moving the sales office to its local headquarters in Jiading.

What it means

Volvo is betting on regional line-ups and lower costs to get through a period when demand is weak and Chinese competition is strong. For buyers, the most visible results will be the long-range plug-in hybrid XC90 and XC60 and the new lower-priced electric model for Europe.

European deliveries of the long-range plug-in hybrid XC90 and XC60 start this year, with US deliveries to follow shortly after.

Source: news.cision.com