Swedish carmaker Volvo Cars reported on Thursday a 76.3% increase in its Q2 net profit, driven by a record gross margin and sales of all-electric vehicles (BEVs).

During the period, net profit rose to SEK 5.66 billion ($536.16 million), compared to SEK 3.21 billion in Q2 2023. Slightly lower revenues were offset by higher margins for BEVs, which reached 20% in the quarter. In Q2 2023, that margin was 15% and in Q1 2024 16%, Kallanish notes.

The company saw its retail BEV deliveries jump nearly 83% y-o-y to 53,000 units, accounting for 26% of its global sales in Q2. Together with plug-in hybrid electric (PHEV) models, the electrified share rose to 48%, up from 39% a year earlier.

“We delivered a strong second quarter performance in 2024 with record underlying profitability, demonstrating our ability to create value despite a complex geopolitical and economic environment,” says ceo Jim Rowan. “Our core operational momentum remains on a firm footing, thanks to the strength of our balanced strategy, product portfolio and our agility in responding decisively to headwinds.”

Plug-in and mild hybrid models serve as a “clear bridge” to an all-electric future, Volvo says. It anticipates higher short-term uncertainties due to macroeconomic challenges, with EU-proposed tariffs on Chinese BEV imports set to impact the “coming quarters.”

“Once the EU investigation concludes later this year, following the member state votes and potential issuance of the definitive tariffs, Volvo Cars will have a final and clear overview of how tariffs will impact it,” the carmaker explains.

The company says it can’t escape the “business realities of today,” and thus expects its retail sales to grow by 12-15% this year. Earlier, it had forecast a 15% growth.

Potential higher tariffs from the EU will mainly affect the EX30, which was among the top 3 BEVs in Europe last quarter. As previously announced, Volvo will start producing the small SUV in Ghent, Belgium in H1 2025. Localised volumes will ramp up during the second half and meet demand from North American and European customers.

Rowan said that so far this year, Volvo Cars has managed to increase its market share in Europe to the highest level ever and grow its share in the US, while maintaining market position in China.

Overall car sales rose 15% to 205,400 cars in Q2, boosted by a 43% growth in electrified car sales. The carmaker says it will continue to prioritise value over volume, and that from 2026 onwards it will start “reap the long-term benefits of its strategy with higher revenue and profitability.”