Finance
Volvo Cars warns 2025 will be turbulent and competitive, sales plunge
Published by Global Banking and Finance Review
Posted on February 6, 2025
3 min readLast updated: January 26, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on February 6, 2025
3 min readLast updated: January 26, 2026
Volvo Cars predicts a challenging 2025 with increased competition and potential sales decline, impacting its profitability and market strategy.
By Marie Mannes and Nick Carey
STOCKHOLM (Reuters) -Volvo Cars warned on Thursday that 2025 would be a tumultuous and competitive year during which it might struggle to match its 2024 sales performance and profitability, sending its shares down 9.2%.
"We're going to see more turbulence," Volvo CEO Jim Rowan told Reuters after the Swedish-based automaker posted a lower fourth-quarter profit. "We're going to see more hyper competition, China will remain very, very competitive and we'll start to see more competition in Europe."
Majority-owned by China' Geely, Volvo faces similar challenges to other major automakers, with a weakening market in Europe, new rivals in China where an electric vehicle price war has been raging for more than two years, and lower-than-expected demand for EVs in Europe and the United States.
European and U.S. tariffs on Chinese-made EVs are also a large worry for Volvo, which is moving more production out of China but faces tariffs in the meantime.
With U.S. President Donald Trump threatening tariffs against Europe, Rowan told analysts on a conference call that "we have the flexibility to increase production" at the automaker's plant in Charleston, South Carolina.
Volvo didn't expect car demand to grow at the same rate as in previous years, and competition would mean price cuts across the board, making it "challenging to reach the volumes and profitability" achieved in 2024, Rowan said in a statement.
Bernstein analyst Harry Martin said in a note that the statement "would point to an annual result well below current sellside consensus."
Handelsbanken analyst Hampus Engellau described Volvo's fourth-quarter performance as "soft."
Volvo did not provide a full year forecast for retail sales.
Its 2024 retail sales grew 8%, roughly in line with Volvo's revised forecast, which was cut from its previous outlook of 12-15% growth.
In September, Volvo walked back its ambitions for electrification and said it would sell new hybrids for longer than originally planned.
Volvo, which sells electric and hybrid cars, reiterated a previous scaled-down 2026 guidance, which included a profit margin goal of 7-8%.
Fourth quarter operating profit was 3.9 billion Swedish crowns ($357 million), down from a year-earlier 5.4 billion. The profit included a 1.7 billion crown writedown related to its battery joint venture Novo Energy.
Excluding joint ventures and associates, operating profit was 6.3 billion crowns, down from 6.7 billion, but exceeding expectations of 5.8 billion crowns.
($1 = 10.9245 Swedish crowns)
(Reporting by Marie Mannes, editing by Anna Ringstrom and Bernadette Baum)
The article discusses Volvo Cars' forecast for 2025, highlighting expected challenges in sales and competition.
Volvo faces challenges from a competitive EV market, particularly in China and Europe, impacting its sales strategy.
Volvo plans to increase production in South Carolina to mitigate tariff impacts on Chinese-made EVs.
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