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Sweden Volvo cars Thursday reported An increase of 12% in operational income and record income, but warned about the severe market challenges ahead of the intensification of the competition of electric vehicles and global tariffs.
The company’s operational revenues reached 22.3 billion Swedish Kronor ($ 2.04 billion) in 2024 amid an increase in sales of 8%.
However, the profits fell 28% in the last three months of the year, which the company said it was affected by a unique deterioration of 1.7 billion kronor related to its joint business with the Swedish battery developer Northvolt, Novo Energy . Interannual sales for the fourth quarter pushed 1% higher, but they throw 6% in China and 2% in the United States
The company reiterated the orientation of 2026 to offer a central gain before the margin of interest and taxes (EBIT) of 7-8%, but said that 2025 would be a “challenging and transition” year to the long-term growth ambitions of Volvo Cars, as I expected slower. Market growth and “greater discount” throughout the industry.
This will make it difficult to match the volumes and profitability of 2024 of the company, he added.
A Fully Electric Volvo Ex30 car is shown during all the electric of London 2024 in Excel in London, on March 28, 2024.
John Keeble | Getty Images News | Getty images
Many car manufacturers are fighting with greater competition and high expense in the space of electric vehicles, including main players as Tesla.
Volvo cars In September he discarded his plan Sell only the EVs by 2030, citing “different adoption speeds” by customers. In its results of 2024, the participation of Battery sales EV increased to 23% of 16% during the previous year.
“I think it is a reasonable performance given the amount of turbulence we saw even in (20) 24,” said the CEO of Volvo Cars, Jim Rowan, “CNBC’s Squawk Box” of the results of the results in a Thursday interview.
“In (20) 25 I think we are going to see that the increase in turbulence. And the way in which it is in, I think we are going to see turbulence in terms of commercial tariffs, perhaps some geopolitical, and we will go To see some policy changes.
Global automotive actions were hammered on Monday after the president of the United States, Donald Trump, announced 25% tariffs in Canada and Mexico, key production bases and supply for vehicle imports in the US Retrieved land. Since the implementation of the duties was stopped for 30 days.
Rowan said Volvo Cars was now evaluating whether he needs to change his production lines to protect himself.
The company has already had to navigate Higher tariffs for electric vehicles that come from China to the European Union And I was relocating China’s production in Belgium as a result, he said.
“Last year, we saw that the batteries increased from 7.5% to 25% when the imports to the US CNBC.
“So we are going to see more of that, and we must wait to see how it develops, of course, but we are preparing to see if we need to start considering production relocation or even the relocation of suppliers in different parts of the world.
“Then we will see this great change to technology beyond electrification, so that software, silicon, connectivity and data become much deeper,” Rowan added.
It is expected that the high cost of developing new automotive technologies, such as partially autonomous vehicles, stimulates industry’s consolidation, which recently leads to Volatile fusion conversations In Japan Sling and Nissan.
About the competition of Chinese players like BydRowan told CNBC: “The discount focuses mainly on the entrance, the EVs of the mass market.”
He added that his company does not “really play in that sector” and mainly sells soft and plug -in electric hybrids in China, taking advantage of the demand for a premium offer.
“That said, I think we will begin to see perhaps in 2025 some additional discounts that can begin to invade the premium market, as well as some of the western brands lose market share in China. Then, of course, they are going to delay their national markets and other global markets and try to collect market share there to keep income flows at the same level, “Rowan said.
“So I think that hypercompetitiveness and price and discipline begin in China. But I think that will impregnate through Europe and North America, until 2025.”
