Volvo Cars (VOLCAR) Strategy update summary

Strategic direction and execution

• Launching 13 new regionally tailored electrified cars by 2030, with 7 for Western markets and 6 for China, leveraging Geely synergies and shared platforms.

• Electrification and advanced hybrids remain the core growth strategy, with BEVs and PHEVs addressing varying market readiness and closing the gap with competitors.

• Software-defined vehicles, HuginCore architecture, and continuous OTA updates enable rapid feature deployment, cost efficiency, and improved customer experience.

• Regional governance and leadership empower local decision-making, supported by Western and Eastern tech stacks for compliance and consumer preferences.

• Design strategy emphasizes brand recognition, desirability, and regional luxury expectations, especially for China and the U.S.

Financial outlook and cost competitiveness

• Targeting above 8% EBIT margin and strong positive cash flows, despite current pressures from tariffs, FX, and underutilization.

• SEK 18 billion cost reduction program completed, with an additional SEK 5 billion realized ahead of schedule.

• Regionalization and local production mitigate tariffs and FX risks, especially in the U.S. and China.

• Synergies with Geely target 5% material cost reduction by 2030, aiming for 30% common parts and 90% common suppliers.

• Investments are declining due to platform reuse and shared technology, enabling record product expansion without increasing CapEx.

Operational and product roadmap

• SPA3 platform and HuginCore software enable scalable, cost-effective launches, with 95% code commonality across new models.

• Contract manufacturing and focused factories (one platform per plant) optimize capacity and reduce complexity.

• Ghent and Chengdu plants serve as multi-brand, shared-platform hubs to improve utilization and competitiveness.

• Commercial success of EX60 BEV validates the electrification strategy, with higher profitability than legacy models.

• New models will enter additional segments, broadening reach in Europe, the US, and China.