Swedish automaker Volvo Cars reported second-quarter operating earnings well above estimates on Thursday, but lowered its 2024 retail sales growth forecast citing an industry-wide slowdown.
The stakes are high for automakers and suppliers who have for years been betting on rising demand for electric vehicles, as the industry faces slowing sales while investment in capacity and technology development outpace demand.
This has put companies under further pressure to cut costs.
Despite warning cries of slowdown in electric car demand throughout the year, Volvo Cars has like others reported upbeat EV sales as of late.
However, the company on Thursday lowered its forecast for growth in full-year retail sales, saying it now saw a growth of 12%-15% from the 15% it previously expected.
Volvo Cars’ operating income, which includes the impact from its stake in loss-making Polestar, rose to 8 billion crowns ($758.4 million) from 5 billion crowns a year ago.
This was above the 6.7 billion crowns expected by analysts based on LSEG data.
Its operating income excluding joint ventures and associates rose to 8.2 billion crowns in the quarter from 6.4 billion a year-ago.
The company’s battery electric vehicle (BEV) gross margins rose to 20% from 16% in the previous quarter underpinning CEO Jim Rowan’s stance that its margins will continue to rise.