Volvo is experiencing a $1.2 billion charge attributed to US tariffs and production delays affecting its latest electric cars, the ES90 and EX90. The company stated that import tariffs hinder profitable sales of the ES90 in the US and pressure margins in Europe. The ES90, planned for a $75,000 launch in the US, and the EX90, launched at $81,000, face reassessed volume assumptions. A non-cash impairment charge of SEK 11.4 billion will be recorded in Q2 2025. Production delays have diminished expected profitability and may influence US manufacturing plans.
"Due to import tariffs the company is currently unable to sell the Volvo ES90 profitably in the United States, while ES90 margins are also under pressure in Europe for the same reason."
"Volvo has to grapple with a 25-percent import tariff decided by US President Donald Trump in April."
"The one-off non-cash impairment charge of SEK 11.4 billion ($1.2 billion) will be booked in the second quarter of 2025."
"Tariffs and the production delays have resulted in a lower than planned lifecycle profitability."
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