Volvo Cars Faces Loss, To Cut 2,500 Jobs Worldwide

Shares in Swedish carmaker Volvo Cars plunged Friday after it said US tariffs and strong competition from local brands in China pushed it into a third-quarter loss.

The company also said it would cut about 2,500 jobs worldwide.

Volvo Cars, controlled by Chinese group Geely, reported revenue of 66.9 billion kronor ($6.7 billion) for the third quarter, down nearly 23 percent from the same period last year.

It swung to a net loss of 5.7 billion kronor for the quarter from a net profit of 4.5 billion kronor a year earlier.

Around 1000 GMT, Volvo Cars shares were down over 25 percent on the Stockholm stock exchange.

“We continue to operate in a very tough environment with strong external challenges: de-globalisation, hypercompetition and climate change,” chief executive Hakan Samuelsson said in a statement.

In response, the company announced a new five-billion-kronor savings plan it said would lead to about 2,000 job cuts in Sweden and 500 more globally, “through natural attrition and by targeted exit packages to employees”.

The company currently employs some 39,300 people worldwide, including 19,500 in Sweden, it said in an email to AFP.

The company, which had bet heavily on electric vehicles, said the removal of consumer incentives for EVs in the United States under President Donald Trump had also hit its margins.

In 2024, Volvo Cars dropped a plan to transition to exclusively EV sales by the end of the decade.

“We are convinced that we have the right long-term strategy addressing these challenges,” Samuelsson said.

“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.”

‘Intense Competition’

Struggling along with other European auto companies in the face of a difficult global landscape, Volvo Cars last year announced an 18-billion-kronor cost-cutting plan.

In May 2025, the group said it would cut 3,000 jobs and two years earlier, 1,300 positions in Sweden were eliminated.

Calling the third quarter “very disappointing”, Samuelsson said the company was struggling in particular in the US and Chinese markets.

In China, the market for “legacy premium brands is in severe decline due to intense competition from new Chinese alternatives, basically eliminating profitability for legacy premium brands,” the chief executive said.

The situation led to a nearly 50 percent drop in revenue in China compared to a year earlier.

Meanwhile in the United States, the carmaker was also affected by “continued negative effects from tariffs”.

Hampus Engellau, an analyst at Handelsbanken, told AFP that in addition to tough markets, Volvo Cars was also suffering from problems of “its own making”.

In particular, Engellau pointed to its failure to increase the “production and sales of its new electric vehicle,” the EX60.

The vehicle has been a success in Europe, with more than 50,000 orders, but Volvo Cars is struggling to ramp up production as quickly as planned.

Volvo Cars said in September that Samuelsson would resign when his contract ends, with Skoda Auto CEO Klaus Zellmer set to replace him “no later” than October next year.