Asger Risom
Delays, rising costs, and new tariffs have forced Volvo Cars into a massive financial writedown. The Swedish automaker is adjusting its expectations for two of its latest electric vehicles, revealing the harsh realities of today’s competitive EV market.
Delays, rising costs, and new tariffs have forced Volvo Cars into a massive financial writedown. The Swedish automaker is adjusting its expectations for two of its latest electric vehicles, revealing the harsh realities of today’s competitive EV market.
Over €1 Billion Lost on Ambitious EV Launch
Volvo Cars is writing down the value of its two new electric vehicles by approximately €1.03 billion.
The massive loss reflects disappointing financial forecasts and mounting market pressures.
Delays Drive Up Development Costs
Both models have suffered from significant launch delays, leading to increased development costs. These setbacks have eroded profitability expectations, particularly for the high-profile EX90.
Tariffs Undercut U.S. and European Prospects
New import tariffs, especially in the U.S., have made it financially unviable to sell the ES90 in key markets. European operations are also feeling the squeeze, with narrower margins threatening profitability.
Software Upgrades Fall Short
Despite major investments in upgrading the EX90’s software, profitability over the vehicle’s lifecycle has been revised downward. The improvements have not fully mitigated the financial impact of earlier setbacks.
€810 Million Hit to Q2 Earnings
The writedown will be reflected in Volvo’s second-quarter financial report for 2025, with an estimated net profit impact of approximately €810 million. Full earnings will be released on July 17.
Strategic Reassessment at the Top
Volvo’s CFO Fredrik Hansson cites market changes, investment priorities, and production delays as key reasons for the writedown. Future sales volume assumptions have also been adjusted downward.
Ongoing Reliability Concerns
Volvo’s electric rollout has faced recurring hurdles. During the EX90’s press unveiling, vehicles had to be jumpstarted using a computer, spotlighting ongoing software and hardware challenges.
Volvo Presses Ahead with EV Investment
Despite recent losses, Volvo is continuing to invest in its electric future. A next-generation EV architecture and updated software systems are in development for upcoming models.
Next-Gen Platform to Launch in 2026
The forthcoming EX60, set for release in 2026, will debut a new cost-efficient EV platform. It incorporates technologies like mega-casting and cell-to-body battery integration to lower production costs and improve performance.
