Volvo Cars adjusts business ambitions for 2026 and beyond

Volvo Cars has announced a significant adjustment to its core business ambitions for the coming years, reflecting a strategic shift towards value creation and a pragmatic approach in response to evolving market dynamics. The updated goals were disclosed ahead of Volvo Cars’ Capital Markets Day, taking place in Gothenburg, Sweden on 5^th September, where the company will outline its plans for growth, technology, and product development.

Instead of pursuing a specific revenue target, Volvo Cars now aims to outpace the premium car market through 2026, continuing its trend of recent years. This adjusted strategy acknowledges the increasing complexities of global trade and tariffs, which have impacted the broader automotive industry.

As part of this revised outlook, Volvo has set a target EBIT margin of 7-8% for the full year in 2026, signalling a focus on maintaining profitability in a challenging economic environment.

In terms of financial strategy, Volvo Cars remains committed to achieving cash flow neutrality in 2024 and 2025. Following this period, the company anticipates a significant increase in free cash flow from 2026 onward, as it begins to reap the benefits of its current investment phase. This phase has been characterised by substantial investments in electrification, technology, and supply chain improvements, which are expected to drive higher profitability and stronger cash flow in the latter half of the decade.

The adjusted ambitions follow Volvo Cars’ recent update to its electrification strategy. The company now targets 50-60% of its global sales to be comprised of electrified vehicles—both plug-in hybrids and fully electric models—by 2025. By 2030, Volvo aims for electrified vehicles to represent 90-100% of its global sales, allowing for a limited number of mild hybrids if necessary.

In line with these electrification goals, Volvo Cars has also updated its CO2 reduction targets, reinforcing its leadership in sustainable practices within the automotive industry. The company aims to reduce its CO2 footprint per car by 30-35% by 2025, compared to a 2018 baseline. This reduction is an important milestone toward the more ambitious goal of a 65-75% reduction in CO2 emissions per car by 2030.

To achieve these environmental targets, Volvo will continue to collaborate closely with its suppliers to reduce emissions across its supply chain, logistics networks, and overall operations. The company is committed to working with partners who share its vision for a sustainable future.

“The sharpened business ambitions we announce today further reinforce our commitment to drive value as a business, while remaining true to our purpose. As I have said before: business is not a game of perfection, it’s about continuous progress and adaptation.”