Volvo Cars profit plunges 68% — but the EV push continues

Volvo Cars has had a tough start to 2026. Last week, the Gothenburg-based car brand reported a dramatic profit decline for Q4 2025, triggering the worst stock market day in the company's history. The share fell over 22 per cent in a single day — a clear sign that investors are worried.

The numbers that shook the market

Operating profit for Q4 fell by a full 68 per cent, from SEK 5.6 billion to SEK 1.8 billion. It's a dramatic decline caused by several converging factors:

US import tariffs: affecting Volvo's exports to America

Weak demand: across several key markets

Aggressive price reductions: to meet the competition

Currency effects: from a weak dollar against the Swedish krona

Loss of EV subsidies: in several countries, including the US

During the most recent three-month period (November 2025–January 2026), Volvo's global sales fell 7 per cent to 177,830 cars. From February onwards, Volvo is only reporting rolling three-month figures instead of monthly data.

EVs are growing — but is it enough?

Despite the gloomy overall picture, there are bright spots. The share of EVs in Volvo's sales increased from 21 per cent to 24 per cent during the quarter. This shows that the transition to electric is actually moving forward, even if not fast enough to offset the overall decline.

Of the 177,830 cars sold during the latest three-month period, 86,462 were chargeable (EVs and plug-in hybrids), a 2 per cent decline compared to the same period the previous year. The number of cars with combustion engines and mild hybrid drivetrains fell even more — down 11 per cent to 91,368 units.

What is Volvo doing now?

Volvo is undertaking a comprehensive cost reduction programme of SEK 18 billion (approximately $2 billion). CEO Håkan Samuelsson highlights that the company has managed to cut costs and achieve positive cash flow — despite the difficult market conditions.

The big hopes rest on the new models:

Volvo EX60: — successor to the bestselling XC60, priced from SEK 689,000 with deliveries planned for the second half of 2026

Volvo EX70: — a new model to further broaden the EV portfolio

Upgraded EX90: — with 800V technology for the Chinese market

EX30 Cross Country: — an updated version of the entry-level EV

What does this mean for privatleasing?

For anyone considering leasing a Volvo, the current situation may actually be positive. When car manufacturers are squeezed by weak sales, they tend to offer more aggressive leasing campaigns to maintain volumes.

We've already seen Volvo offering competitive privatleasing prices on models like the EX30 and EX40. If the trend continues, we can expect attractive introductory prices on the EX60 when it launches as well.

Additionally, Volvo's ongoing cost-saving programme could lead to lower new-car prices over time, which in turn affects leasing costs downward. Competition in the electric SUV segment has never been fiercer, with the Tesla Model Y, Kia EV5, BMW iX3 and Volkswagen ID.4 all fighting for the same customers.

Outlook for 2026

Volvo itself expects sales volumes to grow during 2026, driven by the new model portfolio. However, the company flags continued challenges around tariffs, regulatory uncertainty and a cautious consumer.

For the Swedish EV market, Volvo's situation is an important signal. The transition to electric is costly and requires patience — but the manufacturers that navigate the transition will emerge strong on the other side. With the EX60 on the way and an ever-broader EV portfolio, Volvo has good chances of reclaiming ground during 2026.

Keep an eye on PrivatLeasa.se for the latest leasing deals on Volvo's new EVs.