Volvo posts adjusted operating loss of 3.7 billion kronor as shares fall 24%
Key Facts
Volvo Cars shares fell 24% on Friday, October 23, 2026, their biggest drop on record, and reached a new low after the company reported an adjusted operating loss of 3.7 billion Swedish kronor in the third quarter. Volvo said the measure excludes its share of joint ventures and associates, as well as items affecting comparability, while reported operating income, including those items, was a loss of 5.6 billion kronor. The company had posted positive operating income of 6.4 billion kronor in the third quarter of 2025. Revenue also fell to 66.9 billion kronor from 86.4 billion a year earlier. Reuters linked the share decline to the larger-than-expected loss, alongside weaker demand for electric cars, tariff pressures and market conditions in China.
Company figures showed a widening decline in activity during the quarter, with global sales down 10.7% year over year to 141,609 cars. The pressure was more severe in Greater China, where deliveries fell 40.6% to 20,284 cars compared with the same period a year earlier. Volvo said its revenue in China fell by about 50% year over year amid intense competition from new Chinese brands and sharp pricing pressure. The weakness in China comes after the company warned of deteriorating market conditions there and a slow recovery in demand in the United States. On October 2, Volvo said it would not meet its previous 2026 forecasts for sales volume and cash flow.
Chief Executive Håkan Samuelsson said the third quarter was "extremely disappointing" and that the year had become more difficult than initially expected. He added that Volvo was operating in a "very challenging environment" and needed, in the short term, to strengthen its transformation plan with further decisive measures as pressure on sales volumes intensified. The plan aims to lower the break-even point and improve cash flow, Samuelsson said. In its October forecast update, the company had described falling sales and market conditions as factors preventing it from achieving its previous annual targets. The operating downturn puts execution of the transformation plan at the top of management's challenges, as revenue and sales contract.
Volvo's product plan includes launching 13 new cars by the end of 2030, with three of them to be unveiled in 2027. The company is pairing the plan with measures to reduce indirect spending and said the full financial impact of those measures would be visible by the end of 2027. By then, it expects indirect spending to be about 25% lower than in fiscal 2024. The company ties these measures to efforts to support its transformation plan and improve short-term cash flow as its sales face heavy pressure. The next report will give investors an update on financial developments after these measures; Volvo scheduled publication of its fourth-quarter 2026 report for February 4, 2027, at 07:00 Central European Time.