Volvo Cars Adjusts Core EBIT Margin, Revenue View For FY26

(RTTNews) - Swedish luxury auto major Volvo Cars AB (VLVOF) on Thursday adjusted its margin and revenue target for fiscal 2026, amid the increased complexity especially in relation to global trade and tariffs.

The company, which very recently abandoned its previous plan to sell only electric cars by 2030, now expects core EBIT margin of 7 percent to 8 percent for the full year in 2026. Further, rather than aiming for an absolute revenue target, Volvo Cars' ambition is now to continue outgrowing the premium car market until 2026, as it has done in recent years.

Earlier in April, the company had said that it expects to achieve its ambitions of revenues of between 550 billion Swedish kronor to 600 billion kronor and an EBIT margin above 8 percent during 2026.

Ahead of the Capital Markets Day in Sweden today, Volvo Cars said the adjustment in its core business ambitions for the coming years reflects its focus on value creation while remaining pragmatic amidst fluid market conditions.

During the day, the company expects to reveal details of its value creation approach, technology roadmap and product plan for the coming years.

Further, Volvo Cars continues to aim for cash flow neutrality in 2024 and 2025, followed by a strong free cash flow from 2026 onwards.

From 2026 onwards, Volvo Cars expects to benefit further from its current investment phase through higher profitability and stronger free cash flow.

On Wednesday, Volvo Cars had announced its revised electrification ambitions. The company now aims for 50-60 percent of its global sales by 2025 to consist of electrified cars, so both plug-in hybrid and fully electric models.

By 2030, it expects electrified cars to represent between 90-100 percent of global sales volumes. The remaining 10 percent will allow for a limited number of mild hybrid models to be sold, if needed.

Volvo Cars now aims to reduce its CO2 footprint per car by 30-35 percent by 2025 versus a 2018 baseline.

In Stockholm, Volvo Car shares were gaining around 1.5 percent to trade at 26.83 kronor.