Swedish car manufacturer Volvo Carcut its profit margin and revenue ambitions for the second time this year on Thursday, a day after abandoning a goal of making only electric vehicles by 2030, citing the impact of tariffs and falling demand. tram.
Demand for electric vehicles is slowing, partly due to a lack of affordable models, as well as the impact of EU, US and Canadian tariffs on electric vehicles. carmade in Chinahas made market conditions increasingly difficult for automakers.
Volvo Cars, mostly Chinese owned Geelylowered its operating profit margin target excluding joint ventures and associates to 7-8% from above 8%.
The company also scrapped its sales target of 550 billion-600 billion Swedish crowns ($53.5 billion-$58.4 billion), instead saying it expected to exceed premiums. car market.
This is the second time this year Volvo has cut its profit margin and revenue targets, after missing its annual EBIT target of 8-10% and sales of 1.2 million in January. carFirst published in 2021 every year in the middle of the decade.
While the electric car maker has boasted of its unwavering confidence in achieving all-electric vehicle sales by 2030, on Wednesday it decided to follow other automakers and instead now aim for 90% of its sales by then to be a mix of plug-in vehicles. hybrid and EV.
“We see that this transition is going to take a little bit longer than we originally expected when we set those goals,” CEO Jim Rowan told Reuters.
“As I have said before – business is not a game of perfection, but of continuous improvement and adaptation,” he said in a statement on Thursday.
Rowan said the reduction of some subsidies has contributed to slowing EV growth.
Christina Bu, head of the Norwegian electric vehicle association, said she was not surprised by Volvo’s decision to postpone its electrification target for the time being.
“They are following quite a few other automakers who have made similar statements before, so this is not too surprising,” Bu said.
She stressed the need for strong and long-term political support for the transition to electric vehicles. “Strong policies are still needed to make this transition happen,” she told Reuters.
In releases ahead of an investor event scheduled in Gothenburg, Volvo said it would start with its flagship electric model EX90 The model – which the Swedish carmaker will start delivering to customers this month – will have a single “technology stack” for all car model.
Volvo Cars said separately that it will use a single software system powered by Nvidia chips for all future models and will rely on “megacastings” – large presses to produce large monolithic aluminum chassis – to cut costs for electric vehicles. carS.
It also reported on Thursday a 3% year-on-year increase. car sales in august
