Overview
Volvo Cars AB reported a sequential pickup in retail deliveries during the second quarter, supported by stronger demand for fully electric vehicles in Europe and some recovery in the U.S. Despite that sequential improvement, the company recorded a year-over-year decline in total deliveries of 5.6%, weighed down by a significant downturn in Greater China.
Regional performance and electrified mix
Deliveries in Greater China fell 35% to 24,882 cars, as the company cited intensifying competition, regulatory changes and a weak macroeconomic backdrop as pressures on the wider industry. Within the region, sales of electrified models surged 144% to 9,909 cars, driven in large part by a 172% increase in plug-in hybrid deliveries linked to the XC70 long-range plug-in hybrid.
In Europe and the Rest of the World, total sales rose 2% to 104,259 cars, with deliveries of electrified models up 8%. Electrified vehicles accounted for 62% of sales in that region. Across the group, electrified models - encompassing both fully electric and plug-in hybrid variants - made up 52% of all cars sold during the quarter.
In the Americas, sales climbed 4% to 42,630 cars. Volvo said this reflected a gradual recovery in the U.S. market across two straight months, while cautioning that the market remained affected by weak customer sentiment, heightened competition in SUVs and a slower-than-expected rebound in electric and plug-in hybrid sales following the removal of subsidies.
Fully electric segment and market reception
Global deliveries of fully electric cars rose 14% in the quarter, marking the companys ninth consecutive month of growth in electric-car deliveries. That momentum was supported by demand for the EX30 and EX40 electric SUVs and increased order intake for models such as the EX30, including in less electrified South European markets, the company said.
"Overall market conditions remain challenging, specifically in China, but we are encouraged by the momentum for the fully electric cars in our largest market Europe," said Erik Severinson, Chief Commercial Officer at Volvo Cars.
"We see increased deliveries and order intake for our EX30, even in less electrified South European markets. This is reflected in our higher market share in the growing electric car segments compared to traditional petrol and diesel cars."
Market reaction
The company's shares rose 2.7% in early Stockholm trading by 07:24 GMT following the delivery update.
Conclusion
Volvo Cars' quarterly results present a mixed picture: a clear advance in fully electric demand and sequential retail improvement contrasted with falling overall deliveries year-over-year and acute weakness in Greater China. The balance of regional performance and electrified vehicle mix will be key for near-term volume and revenue trends.