Volvo Faces Economic Headwinds in Q3 2025 Amid Market Uncertainties and Tariff Pressures
Volvo's Q3 2025 report shows profit declines amid North American market pressure, tariff costs, and currency impacts, while some divisions perform well.
- • Volvo's adjusted operating profit for Q3 2025 was SEK 11.7 billion, down from SEK 14.1 billion year-on-year, but above analyst forecasts.
- • Truck deliveries fell 4% to 44,600 units and new orders dropped 14% amid difficult conditions.
- • Higher tariffs cost Volvo SEK 500 million this quarter and are expected to cost SEK 1 billion in Q4.
- • CEO Martin Lundstedt cited uncertainty in North and South American markets and impacts from a stronger krona.
- • Other divisions like Volvo Penta and construction equipment posted strong results despite truck market challenges.
Key details
Volvo reported a reduced adjusted operating profit of SEK 11.7 billion for Q3 2025, down from SEK 14.1 billion the previous year, yet still surpassing analyst expectations of SEK 11.3 billion. Revenues fell from SEK 117.0 billion to SEK 110.7 billion, and truck deliveries decreased by 4% to 44,600 units, while new truck orders dropped 14% to just over 37,100 vehicles. These figures highlight significant market pressures, particularly in North and South America, where uncertain conditions have negatively impacted sales and profitability.
CEO Martin Lundstedt pointed out that the company is currently navigating a "chaotic" market environment in North America influenced by tariff hikes and evolving emission regulations, causing customers to postpone purchases. The net effect of increased tariffs amounted to SEK 500 million this quarter, with a forecast of a SEK 1 billion cost in Q4, contributing to expectations of lower truck sales in North America in 2026. Additionally, a stronger Swedish krona reduced earnings by SEK 1.6 billion during the quarter.
Despite the difficulties affecting trucks, other divisions such as Volvo Penta and construction equipment reported record results, suggesting resilience within parts of the group. The European truck market is anticipated to show some improvement, although electric truck growth remains sluggish due to regulatory uncertainties within the EU.
The company's challenges are also reflected in the stock market where CEO Lundstedt has seen a notable decline in Volvo’s share price following the release of the nine-month report, stirring concerns about future margins and overall financial performance. While complete financial details have not been disclosed, the report underlines a difficult business landscape ahead.
Looking ahead, Volvo will need to manage tariff impacts closely and adapt to shifting regulatory landscapes to stabilize sales and profitability. The company’s mixed performance across divisions and geographic markets will be critical to watch as it moves forward in a volatile global environment.