Volvo Cars, owned by Geely, has recently announced a significant one-off non-cash impairment charge of Skr11.4bn ($1.19bn) for the second quarter of 2025. This charge is attributed to financial adjustments for its EX90 and ES90 platforms, due to launch delays and new import tariffs impacting profitability in key markets.
The Volvo EX90, despite upgrades in software quality and a volume ramp-up plan, is facing decreased lifecycle profitability as a result of past launch delays and additional development expenses. On the other hand, the US market presents a profitability challenge for the Volvo ES90, with import tariffs making sales unviable and margins in Europe also being affected.
The impairment charge will mainly impact expected volumes and planned lifecycle profitability for the EX90 and ES90 platforms. Of the total charge, Skr4.0bn is expected to affect the cost of sales, with the majority of the remaining amount affecting the research and development (R&D) line in the financial reporting. The group’s net income will see an impact of Skr9.0bn, which will be reflected in the Q2 results on 17 July 2025.
Fredrik Hansson, Volvo Cars chief financial officer, stated that the development of the EX90 and ES90 has laid a critical technological foundation for the future, with the Volvo Cars Superset tech stack. The innovations and core systems developed will be used in next-generation platforms, essential for realizing the long-term electrification and software-defined vehicle strategy.
Despite the financial adjustments, Volvo Cars remains committed to investing in its “next-generation” dedicated electric car architecture and software capabilities. The upcoming all-electric Volvo EX60 is on track for a 2026 launch, expected to bring cost minimizations and performance improvements through advanced technologies.
In March 2025, Volvo Cars introduced the ES90 electric sedan, combining fastback and SUV elements with 800V technology, expanding its premium car portfolio. The company continues to focus on innovation and technological advancements to stay at the forefront of the auto industry.
In conclusion, while facing challenges in the current market landscape, Volvo Cars is determined to overcome obstacles and drive forward with its commitment to sustainability and cutting-edge technology in the automotive industry.
