Volvo Cars: $565M Loss, 2,500 More Jobs Cut

Q3 Earnings

A $565 million loss, 2,500 more jobs cut

Volvo Cars posted a third-quarter operating loss of SEK 5.6 billion, about $565 million. A year ago it made a SEK 6.4 billion profit in the same three months. Revenue fell about 23%, to SEK 66.9 billion (roughly $6.7 billion).

Analysts saw a loss coming, just not this big. Citi’s consensus pointed to an adjusted loss of about SEK 724 million. Volvo’s adjusted figure came in at SEK 3.7 billion, around five times worse. Free cash flow was negative SEK 8.9 billion. Investors ran for the exits, and the stock dropped close to 30% on Friday, according to Reuters.

Three things went wrong at once. First, China. Volvo’s revenue there fell almost in half as local brands keep slashing prices. Volvo says it will protect margins rather than join that price war, which means selling fewer cars there for now.

Second, America. Tariffs on imported cars and the end of federal incentives for electrified vehicles squeezed profits. A change in US rules also wiped SEK 1.1 billion off the value of Volvo’s fuel-economy (CAFE) credits, which carmakers used to sell to rivals. Third, raw-material costs moved the wrong way.

The fix is painful. About 2,500 more jobs will go, roughly 2,000 of them in Sweden, through ended consultant contracts, attrition and exit packages. That’s on top of 3,000 cuts announced earlier, together about 6% of the workforce. CEO Håkan Samuelsson wants it done by mid-2027 and didn’t rule out more. Volvo will also strip another SEK 5 billion out of indirect and variable costs, and aims to invest about 30% less than it did in 2024. Former Škoda boss Klaus Zellmer takes over as CEO next year.

The bright spot is the EX60. The new electric midsize SUV already has more than 50,000 orders in Europe, and Volvo expects it to be one of its most profitable models. The catch: new factory technology has made the ramp-up slower than planned.

Why it matters to you. If you shop in the US, expect Volvo to push plug-in hybrids hard. It is fast-tracking long-range plug-in versions of the XC90 and XC60, and XC60 production moves to its Charleston, South Carolina plant in early 2027, which should take that model out of the import-tariff line of fire. A brand under this much pressure also tends to lean on deals to move metal, so it’s worth asking the dealer what’s on the table. Think of Volvo right now as a restaurant with a great new dish and an empty dining room: the EX60 is the dish, and the next year decides whether people come back.

Supply Chain

GM walks away from a US magnet plant

General Motors ended a 10-year deal to buy rare-earth magnets for EV motors from e-VAC, which opened a roughly $500 million plant in South Carolina late last year. GM was meant to take 90% of its output, so the move was meant to cut reliance on China. The termination took effect July 1, and e-VAC has gone to arbitration seeking damages. Neither side gave a reason, but it follows GM’s $6 billion charge in January to unwind EV spending, Reuters reported.

Volkswagen

VW may build its own American pickup

Volkswagen could develop its own body-on-frame truck platform for the US if talks with Ford or another partner on a gas SUV and pickup fall through, with a decision expected by the end of 2026. It is also weighing US production for Audi to dodge import tariffs. At home, things are tense: union IG Metall has given VW until the end of October to reverse plans to end 10 of 13 labor agreements, or prepare for strikes.

Markets

Detroit stocks slide before earnings week

Car stocks had a rough Friday. Stellantis fell about 8%, Ford about 4% and GM about 3% in morning trading, with no fresh bad news to blame beyond a sector-wide selloff and Volvo’s shock. Stellantis reports third-quarter results next week; it had already warned of a weak quarter after posting just a 1.8% adjusted operating margin in the second quarter, though it still stands by its full-year guidance.

Formula 1

An American rookie gets Mexico City practice

Aston Martin confirmed that its 21-year-old third driver Jak Crawford, from Houston, will take Lance Stroll’s AMR26 for first practice at the Mexico City Grand Prix. It’s his fourth practice run of 2026, which ticks off all four rookie sessions the team must run this year, and he returns to the track where he made his F1 practice debut a year ago. Watch for how he handles the thin air at more than 2,200 meters.