by Volvo’s Financial Losses Due to Problems with New Models
Volvo has suffered significant financial losses amounting to $1.2 billion due to problems associated with the launch of the EX90 and ES90 electric models. The main reasons are high US tariffs on Chinese cars and production delays. The company stated that it cannot sell the ES90 in America due to excessive tariffs, which reach 247.5%.
The problems are not limited to the US – Europe is also imposing restrictions on the import of Chinese electric vehicles, which affects the ES90’s margin in the European market. Furthermore, the launch of the EX90 was accompanied by technical difficulties, particularly with software, leading to a reduction in the model’s expected profit.
Company Prospects
Volvo CEO Frederik Hansson noted that, despite the difficulties, the technologies developed for the EX90 will form the basis for the brand’s future platforms. He emphasized that these innovations will help the company realize its strategy for electric and software-defined vehicles.
“The learnings and core systems we have developed, including computing modules and electric powertrains, will be used in the next generations of platforms,” Hansson stated.
However, EX90 sales remain low for now – in the first six months of 2024, only 1,972 cars were sold in the US, which is significantly less than the sales figures for Volvo’s traditional models in a single month.
Although the current results are far from expected, Volvo continues to look confidently to the future, counting on the fact that investments in new technologies will pay off in the long term. The company remains one of the key players in the electric vehicle sector, but it will have to overcome serious challenges related to trade policy and competition.
