Volvo Car Q2 Margin Outlook and Sales Update
Volvo Car AB (ST:VOLCARb) held a pre‑close briefing ahead of its second‑quarter results scheduled for 17 July 2026. Management indicated that the global macro environment remained challenging throughout the quarter, with low visibility across key regions and no clear improvement in consumer sentiment. Bernstein analysts, citing the call, forecast a gross margin of 16.0% for Q2, compared with the consensus estimate of 17.5%, reflecting higher discounting, freight and raw‑material cost inflation, and a weaker sales mix as combustion‑engine models lose ground, especially in China, while smaller battery‑electric vehicles (BEVs) perform better.
Retail sales data released earlier in the month showed a 9% decline year‑to‑date through April and May. April deliveries fell 11% and May fell 7% versus the prior month, with combustion‑engine models down 16% and BEV sales up 6% year‑on‑year, the increase driven primarily by the EX30 and EX40 SUVs. Bernstein estimates the second‑quarter retail sales will be –9%, and notes that the sales mix shift is likely to continue weighing on margins. China sales remain in double‑digit decline, although analysts observed early signs of recovery in the United States.
Volvo also announced that it will resume recognizing losses from its 19% equity‑held electric‑vehicle affiliate Polestar through the income statement starting in the third quarter, following Polestar’s recapitalisation earlier in the year. The brokerage expects Volvo’s cost‑action plan to deliver a benefit to second‑quarter earnings comparable to the impact realized in the first quarter.
Analysts led by Harry Martin described the commentary as “negative versus consensus” and supportive of their low gross‑margin forecast, adding that Volvo’s expectation that the first half will be weaker than the second half remains unchanged, with the upcoming launch of the new EX60 intended to drive volume growth and improve margins.