Volvo AB’s Earnings Beat Expectations, but Margins Compressed due to Competition and Higher Lithium Prices

Volvo AB CL (VOLVY.PK) released earnings for its Q3 2023 that notably increased from last year. The company's earnings came in at SEK14.093 billion (around $1.29 billion), or SEK6.93 per share. This compares with SEK8.687 billion (around $790 million), or SEK4.24 per share, in last year's Q3.

The company's revenue for the quarter rose 15.2% to SEK132.405 billion (around $12.08 billion) from SEK114.917 billion last year. Volvo remains one of the lowest net margin carmakers around the world due to high corporate tax burden in Sweden and escalating competition from EV-makers and other European classic car brands. Also, earlier Volvo noted that despite delivering a higher percentage of electric cars during Q2 2023, its margins on EVs were hit hard by higher lithium prices.

Now Volvo plots its attractiveness case based on the own forecast that the European and North American heavy truck markets would total 290,000 vehicles in 2024.