Volvo shares in free fall, when seatbelts are not enough for the stock market
Swedish automotive pride Volvo Cars endured a day investors will remember as a black Thursday. After publishing its latest financial report, the company’s share price collapsed by more than 22 percent, the largest single day drop in Volvo’s history. This was not a routine correction. It was a collective crisis of confidence, as ambitious electrification plans collided head on with geopolitical and economic reality.
The damage ran into billions of kronor and traced back to the final quarter of last year, where results missed market expectations on almost every meaningful line. Volvo reported an operating profit plunge of nearly 70 percent, driven by an uncomfortable mix of weak demand, the disappearance of electric vehicle subsidies in the United States, and new import tariffs imposed by Washington. Management tried to strike a calm, strategic tone, but it did little to disguise the fact that margins were thinning to worrying levels.
The sharpest blow came from the shift in US trade policy. Planned mega tariffs on cars arriving from the European Union were softened, but still landed at around 15 percent. That proved enough to wipe out most of the profit Volvo hoped to earn across the Atlantic. Matters worsened when the US market, once seen as a cornerstone of Volvo’s electric future, pivoted back towards combustion engines as soon as purchase incentives vanished. Expensive EX series models began to linger on dealer lots, forcing discounts that further unsettled investors.
Analysts who praised Volvo only months ago moved quickly to revise their outlooks. Banks such as JPMorgan and UBS warned that 2026 may bring little relief, as pricing pressure and competition from Chinese manufacturers continue to intensify. Hopes that ownership under Geely would automatically deliver scale advantages and cost savings have so far remained largely theoretical. In practice, Volvo now faces the task of proving its viability in a world where a reputation for safety and Scandinavian design alone no longer guarantees success.
As Gothenburg prepares for further cost cutting and pins its hopes on upcoming models such as the EX60, the shock from the stock market is likely to linger. Volvo has survived difficult periods before, but this collapse underlined just how exposed even a strong brand becomes when caught between trade wars and rapidly shifting consumer behaviour. Any grand rebirth will have to wait for calmer conditions. For now, Volvo’s trajectory looks less like a confident comeback and more like a precarious slide on an icy road.
