Volvo Car AB (publ.)

Q3 results: severe loss driven mainly by China + accounting effects - Retail sales -11% YoY, wholesale down even more as Volvo helps dealers in China by not pushing wholesales. - Revenue -23% YoY (volumes -SEK 10.7bn, sales mix/pricing about -SEK 3.5bn, plus a large negative “other” swing). - Core result SEK -3.7bn; full group result SEK -5.6bn loss including JV/associates and items affecting comparability. - Large non-cash/accounting drags: SEK ~1.1bn write-down related to U.S. CAFE emission credit rule changes (retroactive) and an additional ~SEK 0.9bn accounting effect from Polestar Q2 losses.

Cash flow/liquidity: free cash flow weak, but liquidity remains strong - Free cash flow: SEK -8.9bn in Q3 (seasonality and operating dynamics; inventories reduced but production ramp effects paid down). - Underlying operating cashflow still positive, EBITDA positive despite EBIT losses. - Liquidity is still solid: SEK 32bn cash, SEK 55bn total liquidity—management said this is above needed liquidity ratios. - Near-term cash challenge remains tied to weak volumes and margin pressure, not solvency.

Outlook: no short-term market tailwind—expect continued tough volumes (especially China) - Company’s base expectation: external environment is worse than previously anticipated and likely continues in the near term. - China: market is rapidly declining; management’s view is that no OEM can succeed with “old” global (high-price) recipes—progress depends on regionalization and cost competitiveness. - U.S.: consumer sentiment very weak; loss of plug-in hybrid sales momentum due to discontinued incentive systems, plus tariff impact (Volvo imports most cars; limited local production). - Europe: only region still supporting profitability; electrification momentum is positive (class-leading BEV share).