Volvo Car AB shares skyrocketed 41% on Thursday, their biggest one-day jump since the company’s stock market debut in Stockholm four years ago, after the Swedish automaker reported record third-quarter earnings that far exceeded analyst expectations, powered by an aggressive cost-cutting program.
The surge added nearly $2.9 billion to Volvo’s market capitalization, lifting its year-to-date gains to more than 25%. Analysts say the rally was further fueled by short covering, as traders rushed to close bearish positions amid the company’s surprise performance.
Volvo said its operating income rose to 6.4 billion kronor ($590 million), significantly above forecasts, thanks to an 18-billion-kronor ($1.9 billion) efficiency program launched earlier this year.
The results mark a turning point in the company’s restructuring plan led by CEO Håkan Samuelsson, who returned to the helm in April to rebuild profitability and streamline operations. The plan includes thousands of job cuts and a renewed focus on productivity.
“We are seeing positive signals,” Samuelsson said in a phone interview. While overall car sales fell 8% in the first nine months of 2025, retail sales posted a slight uptick in September, suggesting stabilization in consumer demand.
The strong earnings come despite ongoing headwinds from global trade tensions. Like many automakers, Volvo has been hit by U.S. tariffs and by European Union duties on Chinese-made electric vehicles.
Volvo, owned by China’s Zhejiang Geely Holding Group, has responded by shifting part of its EV production from China to plants in Belgium and South Carolina.
“We must be an American manufacturer, closer to our customers,” Samuelsson told Bloomberg Television, expressing full confidence in Volvo’s long-term outlook.
The company is also expanding production in the United States, while investing heavily in next-generation electric and hybrid models. Upcoming releases include the fully electric EX60, set to debut in January 2026, and the plug-in hybrid XC70, initially manufactured in Taizhou, China.
Volvo’s Chinese ownership has raised questions in Washington over potential restrictions on Chinese-affiliated automakers. Samuelsson said the company’s legal teams remain in contact with the U.S. Department of Commerce, but dismissed concerns of immediate regulatory threats.
“There’s no reason for panic,” he said. “We’ve been in the U.S. for 70 years, and we’ll continue to be there.”
Despite the stellar earnings, Volvo warned that competitive price pressures and rising development costs continue to weigh on profitability. The company’s free cash flow remained negative in the third quarter.
Still, Samuelsson emphasized plans to work more closely with investor relations teams to ensure analysts’ forecasts “better reflect our actual results,” describing current market projections as “scattered.”
An EV charger next to a Volvo car at the Canadian International Auto Show in Toronto, Ontario, Canada February 15, 2024. REUTERS/Cole Burston/File Photo
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