Volvo posts $1.2 billion charge over tariffs, EX90 delays impacting electric vehicle margins.
U.S. tariffs block profitable ES90 sales; EX90 launches without key features after year delay.
Global cost cuts target $1.9 billion savings amid weaker demand and falling operating income.
Volvo Cars said it will record a one-time, non-cash charge of 11.4 billion Swedish krona ($1.2 billion) in the second quarter, citing pressure on profits linked to U.S. tariffs and setbacks in its electric vehicle lineup.
The Swedish automaker reported that the EX90 large crossover, assembled in Ridgeville, South Carolina, will have reduced lifecycle profitability due to launch delays and higher development costs. Production of the EX90 commenced in June 2024, following more than a year of delays due to software-related issues.
Volvo Adds a Touch of SUV and Fastback to Its Latest ES90 Sedan
Volvo also said the EX90 entered the market without several planned features. The initial models lack a lidar system, two advanced driver-assistance programs and bidirectional charging functionality.
U.S. tariffs on Chinese-made vehicles have added further strain. Volvo noted it was unable to sell the ES90 large sedan, built in China, profitably in the United States. Similar tariffs in Europe have also compressed margins on the ES90.
The U.S. remains a critical market for Volvo, which has faced declining sales in Europe and China this year. U.S. sales rose 6% to 64,680 vehicles in the first half of 2025, while global deliveries dropped 9%.
Volvo, majority-owned by China’s Geely Holding, is pursuing extensive cost-cutting measures after reporting a 60% decline in first-quarter operating income. The company plans to reduce expenses by nearly $1.9 billion and has eliminated about 15% of its U.S. commercial workforce as part of cuts affecting approximately 3,000 jobs worldwide.
The automaker said it has suspended providing financial guidance for the current year and for 2026.
Source: Automotive News
