After abandoning its electric vehicle target, Volvo Cars reduces its profit margin and revenue goals.

• On Thursday, Volvo Cars adjusted its revenue goals and 2026 margin target due to the complexity of global trade and tariffs.
• In early afternoon trades, Volvo Cars shares rose by 3.2%, reversing a 10% drop that had occurred throughout the week.
• Earlier, the company announced that it would not focus solely on 100% electric vehicle sales by 2030.

On Thursday, the company scaled back its margin and revenue targets after announcing it was no longer aiming for 100% all-electric vehicle sales by 2030.

The Swedish automaker, owned by China's Geely Holding, has set a new EBIT margin goal of 7-8% for 2026, lower than "above 8%," due to the complexity of global trade and tariffs.

Instead of sticking to its previously announced revenue target of between 500 billion Swedish kronor ($48.6 billion) and 600 billion kronor, it now aims to continue outgrowing the premium car market until 2026.

The ongoing international trade disputes and tariffs pose a significant challenge for automakers, who must balance their geopolitical considerations between the European Union, China, and the U.S., while simultaneously striving to maintain a competitive edge in a market heavily influenced by the transition to electric vehicles.

In early afternoon trades, Volvo Cars shares rose by 3.2%, reversing a 10% drop that had occurred throughout the week.

Volvo Cars is concentrating on electric and plug-in hybrid models during its Capital Markets Day in Gothenburg, Sweden, while discussing its product plans for the upcoming years. The company currently has five fully-electric models available and five more in development.

On Wednesday, it was announced that the target of 100% electric vehicle sales by 2030, as defined as "cars with a cord," would be adjusted to a range of 90-100%, allowing mild hybrid models to continue to be sold. Mild hybrids have internal combustion engines that utilize some electric assistance.

The change in Volvo's plans was due to consumer demand, slow rollout of charging infrastructure, withdrawal of government incentives in certain markets, and uncertainty from fresh tariffs on EVs in various markets.

The company is dedicated to selling only electric vehicles in the future, pending favorable market conditions.

Numerous automakers have reported difficulties in transitioning to electric vehicles due to low demand, while consumers continue to complain about inadequate charging infrastructure and range concerns.

On Thursday, Volvo Cars announced an extension of its partnership with a U.S. chip giant, as it works on developing advanced driving assistance and autonomous driving features. Additionally, the company stated that it would adopt a "single technology stack" in an effort to reduce the costs associated with manufacturing electric vehicles.

On Thursday, Volvo Cars released figures showing that its global sales increased by 3% in August, thanks to a 32% rise in Europe, while China sales plummeted by 23%. In August 2024, fully-electric and plug-in hybrids accounted for 47% of the 52,944 vehicle sales, with the remaining 53% being mild hybrids and vehicles with internal combustion engines.

In the third quarter, the company achieved a record operating profit of 8.2 billion Swedish kronor.