According to Reuters, on September 5, Swedish automaker Volvo Cars lowered its profit margin and revenue expectations for the second time this year. This announcement came just a day after the company abandoned its goal of going fully electric by 2030.
Volvo Cars now expects its operating profit margin (excluding joint ventures and associated companies) to drop from "above 8%" to "7%-8%."
The company also abandoned its previous revenue forecast of 550-600 billion SEK (about 53.5-58.4 billion USD), but it still expects its growth rate to exceed that of the luxury car market.
This marks the second time in a year that Volvo Cars has revised down its profit margin and revenue targets. In January, the company dropped its 2021-announced goals of achieving an annual EBIT margin of "8-10%" and selling 1.2 million vehicles by 2025.
In a statement, Volvo Cars CEO Jim Rowan said, "Our business objectives are now clearer, further strengthening the company's value-driven commitment, while we remain steadfast in our purpose and goals. As I've said before, running a business is not about pursuing perfection but rather continuous improvement and adaptation."
Following the news, Volvo Cars' stock price rose by 3% at 7:44 GMT on September 5, despite a previous drop due to the reduction of electric vehicle sales targets. However, the company's stock has fallen by 10% so far this year.
The demand for electric vehicles has slowed, partly due to the lack of affordable models. In addition, automakers are facing an increasingly challenging market environment with tariffs imposed by the EU, the U.S., and Canada on Chinese-made electric vehicles.
