Volvo Cars Posts Positive 2023 Outlook

Volvo Cars posted a positive outlook for the year this week, with the Sweden-based automaker reporting it saw no point in cutting prices, given healthy demand, as its operating earnings beat estimates.

The automaker reported its manufacturing had emerged from an extended period of supply chain pain and shortages, which affected output and drove up costs. However, Volvo also reported it expected some supply shortages to continue to affect production in the second quarter. 

The automaker, which aims to be all-electric by 2030, also reported robust demand for its models, with unit sales up 10% in the first quarter. 

Volvo’s fully-electric vehicle sales are expected to account for 11% of overall sales this year. The automaker reported plans to grow EV sales without cutting its prices as rival Tesla has done.

Chief Executive Jim Rowan told Reuters that as long as demand remains high for Volvo vehicles, he sees no reason to cut prices.

Rowan noted that lithium prices, a major cost for the carmaker's EVs, were declining despite Chile, the world's second-largest producer of the metal, announcing plans to nationalize its lithium industry.

He stressed more lithium sources are becoming available from other parts of the world, making him comfortable predicting that lithium prices would continue to decline. 

The automaker, majority-owned by China's Geely, reported its operating earnings fell to $494.63 million in the quarter from a year-earlier 6 $970.35 million.