Despite a drop in first-quarter operating income, Volvo reiterated that it sees no need to reduce the price of electric vehicles (EVs) because of good demand for them.
In February, the company announced it would not follow Tesla’s move in a price war to boost demand and fend off increased competition. Yesterday, its CEO Jim Rowan echoed that view, saying Reuters that as long as demand continues to be high for the automaker, he sees no reason to change his view on pricing.
Rowan said that the price of lithium, the company’s main source of costs for electric vehicles, has begun to fall, which should help keep costs down. This comes despite Chile, the world’s second-largest metal producer, saying it would nationalize its lithium industry. He says more sources of lithium are starting to become available from other parts of the world, which reassures him that the cost of the material will continue to fall.
With sales up 10% in Q1, the company reaffirmed its outlook for “solid double-digit growth” in retail sales this year, as long as there are no major supply disruptions. Like other automakers, Volvo has begun to slowly recover from a long supply chain shortfall, which has affected output and pushed costs up. The company said that although there are still some shortages, its production has improved.
Yesterday, the Swedish carmaker said its first-quarter operating income fell to 5.1 billion krona (RM2.2 billion) from 6 billion krona (RM2.59 billion) in the same period a year. last.
