Volvo is taking a £900 million non-cash impairment charge stemming from ongoing software issues and tariffs on the EX90 and ES90.
Volvo was once one of the most bullish car makers when it comes to an EV future, but reality has started to bite for the Swedes, and they’re now backtracking by keeping ICE-based models, such as the new XC90, on sale even when what were planned to be EV replacements (in the XC90’s case the electric EX90) have arrived to keep sales rolling in.
That pragmatic decision is now even more important as problems with Volvo’s new flagship EVs – the EX90 and ES90 – have led to Volvo taking a £900 million non-cash impairment charge caused by significant launch delays and tariff woes.
The EX90 was revealed back in 2022, with Volvo stating it would arrive in showrooms in 2023. However, it didn’t enter production until 2024, due to delays caused by software issues, and although it’s now being sold there are still significant issues with its software and LIDAR, which either don’t work or are missing. This has led to what Volvo is calling “reduced lifecycle profitability.”
Adding to the bill are tariff charges on the new ES90 – which is built in China – with Volvo admitting they can’t sell it in the US without making a loss, and ES90 margins in Europe are a problem too for the same reason.
Fredrik Hansson, CFO at Volvo Cars, said:
Given market developments such as import tariffs in the US, development and launch delays for the EX90 and strategic investment prioritisations, we have reassessed volume assumptions for these two cars. This has resulted in a lower than planned lifecycle profitability.
Filed Under: Car News, Volvo News Tagged With: Electric Cars
Facebook Conversations