Volvo Car Cuts Earnings Goals on Uncertainty in Auto Market, Trade Wars

By David Sachs

Volvo Car cut its earnings expectations, citing complex market conditions and uncertainty around worldwide trade wars.

The Swedish, Geely-owned carmaker on Thursday moved back its financial goalposts for 2026 a day after abandoning its plan to solely sell purely electric cars by the end of the decade amid a turbulent transition to the cleaner vehicles that has dented the global auto industry.

In addition, trade tariffs imposed by the U.S. and EU on China--and potential retaliation--have clouded the future for carmakers.

Volvo said it now expects its earnings before interest and taxes margin to hit 7%-8% in 2026, down from its previous goal of above 8%.

The company also watered down its revenue goal, opting to measure success by whether it outperforms the premium car market until 2026--which it says is has achieved in recent years. Previously, the carmaker had aimed for revenue of 550-600 billion Swedish krona ($53.43 billion-$58.28 billion).

Also on Thursday, ahead of a meeting with investors and analysts, Volvo said it expanded its partnership with Nvidia and said new electric cars would be built with a single, flexible software-based platform that would reduce costs.

The Swedish, Geely-owned carmaker said Thursday that the EX90 model is the first to use the new centralized, digital production system, which includes tech from the U.S. artificial intelligence company. Volvo said the software-centric architecture would combine with a new physical, electric production platform to reduce costs.

"Like a set of building blocks, it can be configured in many different ways," the company said.

Carmakers are increasingly developing these digital platforms--integrated system of software, hardware and digital communication networks that controls everything from the engine to assisted infotainment--as the industry transitions to a digital and electric future.

Nvidia will play a larger role in the company's cars in the coming years, Volvo said. By 2030, the carmaker will introduce cars with with more powerful AI from the tech giant that's capable of performing many more operations per second. Volvo will also leverage Nvidia to develop self-driving tech.

Write to David Sachs at david.sachs@wsj.com