Sweden’s Volvo cars on thuresday Reported A 12% Rise in full-Year operating income and record revenue, but warned of Severe Market Challenges ahead from intensified Electric Vehicle Competition and Global Tariffs.
The Automaker, Which is Majority-Owned by China’s Gealy Holding, Said Operating Income Came in at 22.3 Billion Swedish Kronor ($ 2.04 billion) in 2024 AMID an 8% SAles Increase.
However, Profit Slid 28% in the Final Three Months of the Year, intermediate said was affected by a one-off 1.7 billion kronor impairment related to its joint Ergy. Year-on-Year Sales for the Fourth Quarter Nudged 1% Higher, But Shed 6% in China and 2% in the Us
The company reiterated 2026 guidance to deliver a core earnings before interest and taxes (ebit) Margin of 7-8%, but said 2025 would be a “challening and transition year” as it expected slower Market growth and “increase discounts” across the industry.
This will make it digital to match the company’s 2024 volumes and profits, it added.
Shares Slid 6% at the European Market Open Thursday.
A Volvo ex30 Fully Electric Car is Displayed during Everything Electric London 2024 at Excel in London, March 28, 2024.
John Keeble | Getty Images News | Getty Images
Many Automakers are Struggling with Increased Competition and High Expected in the Electric Vehicle Space, Including Leading Players Such as Tesla,
Volvo cars in September scrapped its plan To sell only EVS by 2030, Citing “Different Speeds of Adoption” by Customers. In Its 2024 results, the share of battery ev sales rose to 23% from 16% during the previous year.
“I think it’s a reasonable performance Given the Amount of Turbulence that we Saw even in (20) 24,” Volvo Cars CEO JIM RON TOLD CNBC’s “Squawk Box Europe” of the RESTS in a results in a results.
“In (20) 25 I Think We’re Going To See that Turbulence Increase. And the way I Frame it is, I Think We’re Going to to see some policy changes. gy. “
Global Automotive Stocks Were Hammered on MONDAY After Us President Donald Trump Announced 25% Tarifs on Canada and Mexico, Key Production and Supply Base for VEHICLE INTOS Ond Since implementation of the duties was packed for 30 days,
Rowan Said Volvo Cars was now Assessing Whether it needs to shift its production lines to protect itself.
The company has alredy had to navigate Increased tarifs for evs coming from China into the European Union And was relacating production from China into belgium as a result, he said.
“Last Year, We Saw Batteries Increase from 7.5% to 25% when you important them to the usa, if they’re originating from outside the usa from a country with a free truck
“So we’re going to see more of that, and we need to see how it plays out, of course, but we’re preparation Oorselves to see where we need to start looking at process or eat sub -development to deify Parts of the world. So it’s going to be turbulent. “
“Then We’re Going to see this big shift to technology beyond electrification, so that software, silicon, connectivity and data, that’s going to believe a lot more profile,” Rowan added.
The high cost of developing new automotive technology such as partially self-driving vehicles is expected to spur industry consolidation, most recent leading to Votile Merger Talks at japan’s Honda and Nissan,
On competition from chinese players such as BydRowan Told CNBC: “The discount is focused mainly on the entry, the mass market evs.”
He added that his company does not “really play in that sector” and mainly sels mild and plug-in electric hybrids in china, tapping into demand for a premium offering.
“That said, I think we’ll start to see maybe in 2025 some additional discounts that may start to encroach on the premium market, as well as some of the western brands lose market share in china, of theirs Going to retrench into their domestic markets and the other global markets and try and pick up market share there in Order to keep the revneue streams at the same level, “Rowan said.
“So I think the price and discipline starts in china. But i do think that will perform through
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