Volvo Cars Sets Sales, Revenue Records in 2023

Volvo Cars reports a record-breaking full-year financial result for 2023 with the highest retail sales revenues and operating profit in its 97-year history.

Its record global sales saw 708,716 cars delivered to customers, returning to the automaker a 21% revenue increase to SEK 399.3 billion ($38.4 billion) for the full year. The underlying operating profit of SEK 25.6 billion ($2.4 billion), excluding joint ventures and associates, represents an increase of 43% compared to 2022. The operating margin excluding JVs and associates came in at 6.4%, up from 5.4% on the previous year.

Volvo says the performance illustrates the strength of its electrified vehicle offerings, containing both battery-electric vehicles on top of an extensive range of plug-in and mild-hybrid models, which formed a significant majority of its total global sales.

The company sold 113,419 fully electric cars in 2023, an increase of 70% versus 2022 and representing 16% of its total global sales volume. It points out that its BEV sales are still based on only two models and does not yet reflect the full potential of the EX30 small SUV, EX90 large SUV or EM90 MPV, all of which are expected to gain more traction this year.

Volvo admits that high lithium prices adversely affected its margins in 2022, but prices fell over the second half of 2023, and it expects an uptick in the underlying profitability of its BEVs going forward.

The automaker says it is working on closing the lower gross margins from its BEVs compared to internal-combustion-engine vehicles and sees the entry-level EX30 set to deliver gross margins of 15%-20%, taking it closer to those of ICE-powered products. This year, Volvo Cars is focused on ramping up BEV production and working hard to add EX30 production to its Ghent plant in Belgium. On top of this, the company will refresh its popular plug-in hybrid cars.

CEO Jim Rowan says: “2023 was a key milestone in our transformation journey. We also took several significant steps forward in our ongoing transformation, while navigating a complex external environment. In doing so, we’ve built a solid foundation for 2024 and the years ahead.

“It is my firm belief that the hard work we have put in during 2022 and 2023 positions us to meet our objectives for the years ahead. Our strategy is well-defined and unambiguous and is the right one for Volvo Cars, our customers and the environment. Our results, order book and key performance metrics prove as much, and our customers clearly like what they see.”