Volvo Cars Encouraged by Consumer Response to BEVs

“The strategic direction remains clear and very much in focus: the fastest transformer in the industry, a fully electric brand with direct consumer relations and lower carbon emissions is our way forward,” CEO Jim Rowan says.

Paul Myles, European Editor

April 29, 2022

3 Min Read
Volvo C40 Recharge screenshot
C40 Recharge is Volvo Cars’ first all-electric CUV.Volvo

Volvo Cars sees its car sales slump 20% in the first quarter of 2022 even as revenues increase 8%.

New CEO Jim Rowan explains that despite the turbulent opening to the year, with war in Ukraine and global logistics issues exacerbated by the upsurge of COVID in China’s automotive heartland, the Swedish automaker has seen encouraging performance.

Heading up that performance was strong consumer demand for its BEV products that supports Volvo Cars’ commitment to becoming an exclusively electric carmaker by 2030.

Rowan (pictured, below left) says: “In the first few months of 2022, the war in Ukraine has destroyed lives and displaced millions of innocent people. The same war has also sent already rising inflation to new heights and further disrupted supply chains that were already fragile. When summarizing Volvo Cars’ performance during this first quarter, I am incredibly pleased that we have delivered such stable results.”

Jim Rowan-Volvo.jpg

Jim Rowan-Volvo

The interim report for the first quarter shows Volvo Cars’ revenue amounted to SEK74.3 billion ($7.7 billion), up from SEK68.6 billion ($7.1 billion) in the same period last year. EBIT for Volvo’s core operations was SEK5.9 billion ($618 million) or 7.9%, and reported EBIT was SEK6 billion ($628 million) or 8.1%.

Volvo sold a total of 148,295 cars in the first quarter; however, late in the quarter the company was hit by a shortage of a specific component, which also will impact second-quarter production. It considers this a temporary setback and expects the supply chains to improve in the second half of the year. The company expects marginal growth in sales volumes for full-year 2022 compared to 2021, although uncertainty is high.

“The strategic direction remains clear and very much in focus: the fastest transformer in the industry, a fully electric brand with direct consumer relations and lower carbon emissions is our way forward,” says Rowan. “To achieve our ambitions, we will increase our pace of product development, strengthen the resilience of our supply chain and accelerate our digital and software capabilities.”

In answer to a question by Wards about Volvo’s stance on battery-swapping and hydrogen fuel-cell technologies, the Volvo executive says those had been considered but, for the next five years at least, have been ruled out in favor of existing battery systems.

Explaining Volvo’s powertrain strategy, Rowan says: “As a technology company we look at a full range of different technologies. A good example of this is that we have asked what the core technologies of the company should include. One of those decisions is that we want to be in full control of the propulsion systems of the next-generation cars – that’s why we have made that investment with Northvolt on the batteries themselves.

“This allows us, one, to understand the pricing infrastructure of batteries; two, it lets us understand the chemistry and detailed engineering aspects of batteries and, three, allows us to produce these in mass volume right here, next to the factory, further reducing logistics costs. More importantly, we think battery supply may become constrained and that’s why we wanted to be in control of that.”

 

About the Author(s)

Paul Myles

European Editor, Informa Group

Paul Myles is an award-winning journalist based in Europe covering all aspects of the automotive industry. He has a wealth of experience in the field working at specialist, national and international levels.

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