Volvo Cars announced an 11% year-on-year sales decline for April, with global deliveries totaling 58,881 vehicles compared to 65,838 in April 2024. The drop, attributed to weakened demand for fully electric vehicles and ongoing market pressures from U.S. tariffs, marks a significant challenge for the Swedish automaker, which has been transitioning toward an all-electric lineup by 2030.
The decline in sales, particularly in the U.S. and Europe, reflects broader industry trends as consumers hesitate amid economic uncertainties and tariff-related cost increases, impacting Volvo’s electrified vehicle strategy.
Fully electric models, which accounted for 20% of April sales, saw a 32% drop, with deliveries falling to approximately 11,776 units. Electrified vehicles, including plug-in hybrids, which comprised 45% of total sales, declined by 16%. In the U.S., sales fell 13% to 8,300 units, driven by reduced demand for the electric EX90 SUV and tariff uncertainties affecting models like the Polestar 2, built in China. Europe, Volvo’s largest market, reported a 7% sales decrease, with 28,600 vehicles sold, as consumers favored hybrids over fully electric options. China, however, showed resilience, with a 3% sales increase to 14,200 units, bolstered by demand for the EX30 compact electric SUV produced locally.
The sales slump comes amid Volvo’s efforts to regionalize production to mitigate U.S. tariff impacts. The company has ramped up output of the EX90 at its South Carolina plant, which has a capacity of 150,000 vehicles annually, and is considering adding another model to U.S. production. These moves aim to reduce reliance on imports, particularly from China, where tariffs have disrupted supply chains.
Volvo’s CEO has emphasized the company’s long-term strategy of building where it sells, but short-term challenges, including a 2.5% reduction in gross profit margins projected for 2025, have led to a 3% drop in the company’s shares and a 29% year-to-date decline. Despite the April setback, Volvo projects 30-35% global retail sales growth through 2027, driven by new electric models and hybrid offerings, though analysts warn that tariff volatility and consumer hesitancy could pose ongoing risks.