Swedish carmaker Volvo Cars reported Wednesday a 35.5% annual growth in its third-quarter net profit, as costs lowered, retail sales increased and gross margins improved, Kallanish reports.

The company posted a net profit of SEK 4.3 billion ($405.9 million) in the period and a gross margin of 20.5%, compared to 19.6% in Q3 2023. It sold 172,800 cars, with battery electric vehicles (BEVs) and plug-in hybrids (PHEVs) accounting for 25% and 23% of the sales, respectively. Next year, the company aims for EVs to account for 50-60% of its global sales.

The carmaker says its EV share was the highest for the premium car industry in Europe, increasing by 10% year-on-year during the first nine months of 2024. However, it warns that the weakness in the automotive market has recently accelerated. “Demand continues to soften and is now affecting the premium segment,” it adds.

“Our industry is facing an increasingly volatile environment,” says ceo Jim Rowan during Volvo’s Q3 earnings presentation. “Macroeconomic headwinds are intensifying, as is geopolitical complexity.”

Despite the challenges, Rowan notes Volvo Cars has managed to demonstrate resilience in Q3, which he says is reflected in the overall financial performance.

Noting that continued cost actions “remain necessary going forward,” he shows confidence that the “strong and balanced product portfolio of BEVs, PHEVs and mild hybrids will remain attractive going forward.”  

The carmaker has five BEV models on the road and is developing another five. It says that starting with the EX90, all its BEVs will be software-defined “reflecting our status as the first European car company to harness core computing technology.” The cars will also benefit from the so-called Superset tech stack – one set of hardware and software that will make the BEVs better over time, and should unlock more efficiency and profitability for their production.

“We cannot control the current geopolitical uncertainties and economic headwinds. But we can navigate them with speed and purpose, and perhaps most importantly, with a clear focus.” Says Rowan. “Our focus is more than ever on preserving cash while creating value – for our shareholders, our customers and our employees.”

Based on expectations that the industry “will remain under pressure,” Volvo Cars anticipates total sales volume to grow only 7-8% this year, from a previous estimate of 12-15%.