Volvo takes US$1.2 billion charge over tariffs and EV model delays

[STOCKHOLM] Volvo Car is taking a one-time non-cash impairment charge of 11.4 billion Swedish kronor (S$1.51 billion) in the second quarter due to delays of some of its electric models and the escalating cost of tariffs.

Development delays and duties in the US have hit two of Volvo’s battery-powered models, the EX90 sport utility vehicle and ES90 sedan. The effect on net income will be 9 billion kronor in the period, the carmaker said on Monday (Jul 14).

Its shares fell as much as 5.6 per cent in Stockholm, the steepest intraday drop since April. The stock is down around a quarter this year.

“Due to import tariffs the company is currently unable to sell the Volvo ES90 profitably in the United States, while ES90 margins are also under pressure in Europe for the same reason,” the company said in a statement.

The Sweden-based automaker, controlled by China’s Zhejiang Geely Holding Group, is among the more tariff-exposed global car brands and has previously said it’s looking into adding more production at its US plant. Volvo is also struggling to attract EV buyers in the highly competitive Chinese market, despite its access to the Geely ecosystem. BLOOMBERG