Volvo Cars marked another record-breaking year in 2024, reporting its highest-ever full-year retail sales, revenues, and core operating profit in its 98-year history. However, the automaker anticipates a challenging 2025 due to competitive and geopolitical pressures impacting the global automotive industry.
The company’s full-year revenue surpassed SEK 400 billion for the first time, supported by a new all-time sales record of 763,389 cars. Operating income (excluding joint ventures and associates) rose 6% year-on-year to SEK 27 billion, with a core EBIT margin of 6.8% (up from 6.4% in 2023).
Electrification and Strong Financials Drive Growth
Volvo Cars saw substantial growth in its electrified lineup, with fully electric car sales increasing by 54% to 175,194 units, making up 23% of total global sales—the highest share among legacy premium carmakers. In total, 46% of all Volvo cars sold in 2024 were either fully electric or plug-in hybrids.
Additionally, free cash flow rebounded strongly to SEK 1.1 billion, a significant turnaround from SEK -9.0 billion in 2023, reflecting disciplined financial management.
Q4 Performance and Challenges
Despite record-breaking annual results, Q4 2024 showed signs of slowing growth, impacted by market conditions and a SEK 1.7 billion write-down in the NOVO joint venture. Quarterly revenue rose to SEK 112.1 billion (up from SEK 109.4 billion in Q4 2023), but operating income declined to SEK 3.9 billion (from SEK 5.4 billion in Q4 2023).
Margins faced pressure due to inventory reductions, sales channel mix, and increased competition. The Q4 EBIT margin fell to 3.4% from 4.9% a year earlier.
Looking Ahead to 2025: A Year of Transition
Volvo Cars expects 2025 to be a challenging transition year, citing increased competitive pressures, shifting market dynamics, and geopolitical uncertainties. The company acknowledges that reaching 2024’s volume and profitability levels may be difficult, particularly in the first half of 2025, as order books normalize and industry-wide discounts rise.
However, Volvo Cars remains committed to its long-term strategy, with five new or refreshed models launching in 2025 to help navigate market headwinds. It also aims to maintain positive free cash flow despite the expected turbulence.
“2025 will be a year of transition,” said Volvo Cars CEO Jim Rowan. “We must be prudent, diligent, and disciplined while continuing to invest in our future. The global car industry faces cyclical, structural, transformational, and geopolitical challenges, but we are positioned well to navigate them.”
While Volvo Cars does not expect the market to grow at the pace of previous years, its strong liquidity, diversified product lineup, and cost-efficiency measures will help weather the storm as it prepares for long-term growth beyond 2025.
