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Volvo Deepens Ties With NVIDIA, Revises Outlook for 2026 & Beyond
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Volvo (VLVLY - Free Report) provided several updates regarding its electric vehicle (EV) goals, including an expanded partnership with NVIDIA Corporation (NVDA - Free Report) to enhance the core computing system for its EX90 SUV.
Later in the decade, Volvo plans to produce vehicles using NVIDIA DRIVE Thor, which incorporates the NVIDIA Blackwell GPU architecture. This technology will allow Volvo to implement more advanced driving systems, such as autonomous driving and generative AI features.
To improve manufacturing efficiency and reduce costs, Volvo will use a unified tech and software platform called the Superset tech stack for all its vehicles. This single platform, adaptable to different models, will streamline Volvo's engineering efforts by focusing them on a common direction, rather than individual car projects.
Volvo’s EV models will be built on an electric technology platform called SPA3, which will be supported by the Superset tech stack. The first vehicle based on SPA3 will be the all-electric EX60 midsize SUV.
Volvo Revises Financial Outlook for 2026 and Beyond
Volvo revised its financial targets for 2026 and beyond to respond to shifting market dynamics. The company now aims for an EBIT margin of 7-8% for fiscal 2026, down from its previous target of 8% or more. VLVLY also aims for cash flow neutrality in 2024 and 2025, with strong free cash flow expected starting in 2026. The company has scrapped its earlier sales target of $53.5-$58.4 billion and now focuses on outpacing the growth of the premium car market through 2026.
Volvo has also adjusted its EV sales targets in response to evolving market conditions and customer preferences. The company now expects 50-60% of its global sales to be EVs, both fully electric and plug-in hybrids, by 2025.
By 2030, Volvo anticipates that EVs will comprise 90-100% of its global sales. If required, the remaining 10% will allow for the sales of mild hybrid models. These new goals are aimed at reducing VLVLY's carbon emissions per vehicle by 30-35% by 2025 and 65-75% by 2030.
Per Jim Rowan, CEO of Volvo, the shift to electrification will not be linear, with different markets and customers transitioning at varying speeds.
VLVLY Reports Rise in August Sales on Rising EV Deliveries
Volvo reported a 3% year-over-year increase in global sales for August, totaling 52,944 vehicles, driven by strong EV sales in Europe despite challenges in the Chinese market.
EV sales, including plug-in hybrids and fully electric vehicles, rose 47% and accounted for 47% of all cars sold in August, with fully electric vehicles making up 25% of total sales.
In Europe, sales increased 32% year over year, with EV sales up 52%. In the United States, overall sales declined 2% year over year, but plug-in hybrid sales surged 84%. Sales in China fell 23% year over year, although electrified model sales rose 10%.
Volvo's best-selling model was the XC60, followed by the XC40/EX40 and EX30.
The consensus estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.71% and 35.46%, respectively. EPS estimates for 2024 and 2025 have improved 51 cents and 37 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for PLOW’s 2024 earnings suggests year-over-year growth of 60.4%. EPS estimates for 2024 have improved 15 cents in the past 60 days.
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Volvo Deepens Ties With NVIDIA, Revises Outlook for 2026 & Beyond
Volvo (VLVLY - Free Report) provided several updates regarding its electric vehicle (EV) goals, including an expanded partnership with NVIDIA Corporation (NVDA - Free Report) to enhance the core computing system for its EX90 SUV.
Later in the decade, Volvo plans to produce vehicles using NVIDIA DRIVE Thor, which incorporates the NVIDIA Blackwell GPU architecture. This technology will allow Volvo to implement more advanced driving systems, such as autonomous driving and generative AI features.
To improve manufacturing efficiency and reduce costs, Volvo will use a unified tech and software platform called the Superset tech stack for all its vehicles. This single platform, adaptable to different models, will streamline Volvo's engineering efforts by focusing them on a common direction, rather than individual car projects.
Volvo’s EV models will be built on an electric technology platform called SPA3, which will be supported by the Superset tech stack. The first vehicle based on SPA3 will be the all-electric EX60 midsize SUV.
Volvo Revises Financial Outlook for 2026 and Beyond
Volvo revised its financial targets for 2026 and beyond to respond to shifting market dynamics. The company now aims for an EBIT margin of 7-8% for fiscal 2026, down from its previous target of 8% or more. VLVLY also aims for cash flow neutrality in 2024 and 2025, with strong free cash flow expected starting in 2026. The company has scrapped its earlier sales target of $53.5-$58.4 billion and now focuses on outpacing the growth of the premium car market through 2026.
Volvo has also adjusted its EV sales targets in response to evolving market conditions and customer preferences. The company now expects 50-60% of its global sales to be EVs, both fully electric and plug-in hybrids, by 2025.
By 2030, Volvo anticipates that EVs will comprise 90-100% of its global sales. If required, the remaining 10% will allow for the sales of mild hybrid models. These new goals are aimed at reducing VLVLY's carbon emissions per vehicle by 30-35% by 2025 and 65-75% by 2030.
Per Jim Rowan, CEO of Volvo, the shift to electrification will not be linear, with different markets and customers transitioning at varying speeds.
VLVLY Reports Rise in August Sales on Rising EV Deliveries
Volvo reported a 3% year-over-year increase in global sales for August, totaling 52,944 vehicles, driven by strong EV sales in Europe despite challenges in the Chinese market.
EV sales, including plug-in hybrids and fully electric vehicles, rose 47% and accounted for 47% of all cars sold in August, with fully electric vehicles making up 25% of total sales.
In Europe, sales increased 32% year over year, with EV sales up 52%. In the United States, overall sales declined 2% year over year, but plug-in hybrid sales surged 84%. Sales in China fell 23% year over year, although electrified model sales rose 10%.
Volvo's best-selling model was the XC60, followed by the XC40/EX40 and EX30.
Zacks Rank & Key Picks
VLVLY currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space are Dorman Products, Inc. (DORM - Free Report) and Douglas Dynamics, Inc. (PLOW - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.71% and 35.46%, respectively. EPS estimates for 2024 and 2025 have improved 51 cents and 37 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for PLOW’s 2024 earnings suggests year-over-year growth of 60.4%. EPS estimates for 2024 have improved 15 cents in the past 60 days.