Volvo Cars Registers Record Revenue in Q4 2022

Volvo Cars reports record revenues for the final quarter of 2022 but warns of “headwinds” such as ongoing supply chain issues and high prices for lithium-ion battery materials.

In spite of a 12% drop in vehicle sales, largely owing to Chinese COVID lockdowns and semiconductor restrictions, the automaker saw revenue rise 17% to a record $3.12 billion. That said, profit slipped to $322 million, down from $350 million in Q4 2021, with overall profit margins at 6.8% compared to 7.2% for the previous year.

While the automaker continues to see a growth in its BEV sales, up to 11% of total vehicle deliveries for 2022 against 4% in 2021, the all-electric offerings still lag in profit margins compared to internal-combustion-engine vehicles, with unit profits of about 6% compared to more than three times that for ICE models.

In presenting the findings, Volvo Cars President and CEO Jim Rowan says future BEV platforms, including a compact “affordable” SUV, and the expected fall in prices of battery materials should see unit profitability rise to between 8% to 10%.

Volvo XC60 Recharge PHEV

Rowan says:“2022 was an ongoing acceleration of our strategy and navigating some challenges and we made some good headway. The challenges (were) the energy crisis and rising inflation, higher costs of raw materials, semiconductor shortages and logistic disturbances.”

He points to the Russian invasion of Ukraine, which is likely to continue through the coming year, and “the continued COVID-related lockdowns, primarily in China in 2022, forced plant closures and shortages of key components as being negatives for the coming year However, he says Volvo Cars is still on course to reach a 50% global sales share of all-electric cars by the middle of the decade and “we remain steadfast on that strategic journey.

“If we look forward to 2023, despite the macro-economic stage, our execution engine continues to improve. We expect solid double-digit growth in global sales and we also intend to grow our BEV product.”

Rowan also confirms rumors that the automaker wants to move toward a direct sales model for consumers. He says, “We will also transform (our operation in) the U.K. to become our first fully direct, consumer-facing market.”