Volvo’s Q1 profit falls less than expected as U.S. EV sales slide

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Volvo Cars reported on Wednesday a smaller-than-expected drop in profits for the first quarter of 2026. The Swedish automaker credited aggressive cost-cutting efforts for helping offset an 11% decline in revenue amid a surge in global electric vehicle sales.

Volvo says it brought in $7.8 billion in revenue for the first three months of 2026, down from $8.9 billion in the same period last year. The company made $172 million in operating profit, compared to $204 million a year ago. For every dollar of revenue, Volvo kept about 2.2 cents in operating profit. Earnings per share improved, rising from about 4 cents to 5.8 cents per share. Shares of Volvo rose 1% on the news, despite being down 25% year to date.

“The first quarter of 2026 shows a divide between what we can control and a very challenging external environment,” Volvo CEO Håkan Samuelsson said in the company’s press release.

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Volvo’s electric push seems to be working. Its 24% electric vehicle share is now the highest among legacy premium rivals.  The company says the growth was driven by six consecutive months of EV sales growth through March, led by the 30, 40, and 90 series.

“The areas we can control continued to improve in Q1. Our BEV share increased to a class-leading level, and we delivered a strong momentum in our cost and cash actions,” Samuelsson said.

In Europe, Volvo is now among the fastest-growing premium electric brands. The UK posted a record quarter. But outside Europe, conditions are considerably tougher. In the US, the removal of the $7,500 federal EV tax credit hit both electric and plug-in hybrid sales harder than the company anticipated. The company also points to tariffs and falling consumer confidence in the US for weaker sales.

“US consumer confidence is under significant pressure, and the market is taking longer to recover from the removal of incentives, with sales of electrified cars declining significantly,” the company said in its press release.

Volvo’s newest all-electric midsize SUV, the EX60, began production last week in Gothenburg, with customer deliveries scheduled for this summer. Orders are already beating expectations, and margins are running ahead of internal targets. 

Volvo expects the EX60 to expand its addressable EV market and drive volume growth through the second half of 2026. Priced around $60,000 in the U.S., the EX60 is expected to compete with premium rivals such as the BMW iX3 and the Mercedes GLC.