Volvo is significantly lowering its financial expectations due to setbacks surrounding the large, new, and electric EX90 and ES90.
Trouble with the lidar and other complex systems, software problems, changing market demand, and above all, import tariffs: things are not going well for Volvo when it comes to the brand’s new electric flagships. The introduction of the EX90 (SUV) was delayed for a long time due to technical problems in particular, while the problems for the ES90 (well, what is that actually) mainly cluster around trade tariffs. The ES90 is built in China, which means that it is very difficult to sell in Europe and especially in the US. In Europe, this puts pressure on profits, but Volvo considers a profitable career for the ES90 in America to be downright impossible at the moment.
The Swedish Geely subsidiary is therefore now officially stating that it expects a significantly less rosy result for the EX90 and ES90 than previously thought. Sales results will simply be disappointing, says CFO Hansson, and that will mean that less profit will be made over the entire life of these models.
Volvo is therefore implementing a so-called ‘one-off non-cash impairment charge’ of 11.4 billion Swedish kronor. Converted to euros, that is over 1 billion. So that money does not specifically disappear anywhere, but is written off as it were on the prospects. Volvo reassures its shareholders with the promise that there will still be plenty of investment in the development of a new electric architecture for mid-size models, of which the equally fully electric Volvo EX60 will be the first next year.