Despite warnings of cooling interest on electric vehicles (EV) worldwide, Volvo seems to have bucked the industry trend by reporting its highest-ever quarterly profit (EBIT) in the second quarter of 2024 (Q2 2024).
Volvo Cars has reported a core operating profit, excluding joint ventures and associates, of SEK8.2 billion (approx. RM3.61b) for Q2 2024, representing a 28% increase over the same period last year. Correspondingly, the EBIT margin also reached a record high of 8.1%, compared to 6.3% in Q2 2023.
The Swedish carmaker says that the improvement in profitability was a result of “pricing discipline, internal cost control, and sustained growth in sales”. Particularly, its global retail sales rose by 15% year-on-year to 205,400 cars.
A large portion of those sales were from its electrified line-up – including both fully electric (EV) and plug-in hybrid models (PHEV) – which accounted for 48% of its sales in the quarter (43% YoY growth). The share of sales for EVs also rose to 26%, resulting in a growth of EV margins from 16% from the previous quarter, to now 20%.
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The Volvo EX30 was one of the largest contributor to its EV sales, especially within Europe where the compact crossover is now amongst the top three best-selling EVs. The XC60 plug-in hybrid also continues to lead the charge in PHEV sales within Europe.
Despite its strong performance in the second quarter of the year, though, Volvo Cars has cut its 2024 sales growth forecast from 15% to now “12-15%”. Speaking to Reuters, Volvo Cars CEO Jim Rowan said that while the company still hopes for a 15% growth in sales, it has now revised its forecast to a range in order to account for uncertainties.
“It’s really driven by tariffs,” Rowan told the publication. “It’s a short term issue for us, but it is an issue and we’re just going to have to deal with that.”
Earlier this month, the EU announced provisional tariffs of up to 37.6% on imports of made-in-China EVs, which the company says might affect the EX30. The company says that a clearer view on the tariff’s impact will only be available later this year after the member states’ vote.
Nevertheless, the company has already previously announced that the Volvo EX30 EV will be built at its Ghent plant in Belgium starting next year, with volumes to ramp up by the second half of 2025.
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