Volvo Cars re-confirms mid-decade ambitions at Capital Markets Day

Volvo Cars reconfirmed its mid-decade ambitions at the company’s first-ever Capital Markets Day in Stockholm today, when management updated shareholders and analysts on progress towards realizing those ambitions.

In 2021, Volvo Cars announced its strategic ambitions to be one of the fastest transformers in the automotive industry and to become an all-electric car brand by 2030. It has also set itself the goal of shaping the future of mobility with strong ambitions for sustainable growth.

During the Capital Markets Day, management reconfirmed that the company remains committed and fully focused on its mid-decade ambitions despite the ongoing macroeconomic challenges around the world. Throughout the day, speakers provided strategic insights into how Volvo Cars is delivering on its ambitions.

This includes the goal of selling 1.2 million cars annually by mid-decade, with a 50 percent share of all-electric cars, selling half of all cars through online channels, and achieving an annual EBIT of 8-10 percent. Volvo Cars is also on track to reduce life cycle CO2 emissions per car by 40 per cent compared to the 2018 baseline and to be an employer of choice.

Attendees at Kungsträdgården in downtown Stockholm also had the opportunity to see the all-new Volvo EX90, the company’s new all-electric flagship SUV. The Volvo EX90 is the first in a family of new all-electric Volvo models as the company aims to launch a new model every year for years to come.

“We have one of the most ambitious electrification plans in the industry,” said Jim Rowan, Volvo Cars chief executive. “By the end of this decade, we only want to sell fully electric cars. The Volvo EX90 is not only our first electric SUV, it also marks the beginning of an intensive renewal period in which we will launch a new all-electric car each year for the coming years, powered by advanced technology and improved connectivity. We are proud and grateful for the investor support we have received thus far and look forward to the continued journey ahead.”

Agenda and summary of the Capital Markets Day

Following an introduction and presentation of the new Volvo EX90 by Volvo Cars Chief Executive Jim Rowan, Robin Page, Head of Global Design & UX, presented the design and user experience inside Volvo’s new generation of all-electric vehicles.

Software & Core Computing

An overview of how we develop and control software that we see as adding value to our customers. This is increasingly becoming a differentiating element for future mobility, defining the customer experience and the potential for subscription-based upgrades. Software enables safety to be raised to a new level, as it is key to body control, vehicle movement and propulsion, and vision and perception. Here Volvo Cars explains how the strategy of combining in-house software development with selected strategic partnerships helps Volvo Cars to control the value chain and reduce time to market. It lays out the rationale behind the adoption of centralized computing, how it differs from distributed computing, and the major security improvements that core computing enables. During the presentation we give more clarity on what types of software development Volvo Cars will do internally and where the company will rely more on partners and suppliers.

Presented by Sanela Ibrovic, Head of Connected Experience; and Elsa Eugensson, Senior Program Manager AD & ADAS.

electrification

In this session, Volvo Cars shares in more detail its electrification strategy and how it is being implemented. The new Volvo EX90 marks an important milestone in this transformation. During this session, Volvo Cars will present the cell product strategy and how Volvo Cars is enabling vertical integration with innovative manufacturing processes. Behind this is a consistent strategy through effective sourcing of batteries, electric motors and inverters. In addition, Volvo Cars is increasing its capacity by establishing resilient in-house battery production with Northvolt and establishing an e-motor line at Volvo Cars Skovde factory to complement its Tier 1 suppliers. In the long term, this will mean that the currently higher costs of electric cars will match those of internal combustion engine cars.

Presented by Kerstin Enochsson, Head of Procurement and Supply Chain; and Erik Severinson, Head of Program Management and Strategy.

sustainability

Because the automotive industry is part of the climate change problem, it is Volvo Cars’ responsibility to change and be part of the solution. For this reason, sustainability is key to the future success of the company and central to its strategy and ambitions. During this session, the company shares an update on progress toward ambitious mid-decade sustainability goals, including a 40 percent reduction in total CO2 emissions per car and an ambitious circular agenda. Along with key metrics about the new Volvo EX90, it explains how Volvo Cars is improving its operations and supply chain.

Presented by Henrik Green, Head of Advanced Technologies and Sustainability and Anders Kärrberg, Head of Global Sustainability

Commercial Skills

An overview of the global business strategy to drive growth towards Volvo Cars’ ambition of 1.2 million cars by mid-decade and how this is being implemented. The growth driver is based on a double-edged disruption of electrification and the power of digitization for a better consumer experience. Combined with a further strengthened brand, this allows for a strong approach to pricing. During the session, Volvo Cars gives more details on the omnichannel setup, which enables direct and constant interaction with its customers and is tailored to the needs of each sales region. The company also unveiled its pilot plan to transition the UK market to consumer-facing with strong digital solutions by mid-next year. The details of how the commercial transformation will help meet Volvo Cars’ mid-decade goal of achieving 8-10 percent EBIT margins were also revealed during this session.

Presented by Bjorn Annwall, Chief Commercial Officer and Deputy CEO.

finance

The transformation process requires solid finances and well thought-out capital allocation. During the session, Volvo Cars presented its approach to combining profitability with ambitious strategic ambitions and growth targets. In addition, the details of financing the increased production capacity and vertical integration were also presented.

Presented by Johan Ekdahl, Chief Financial Officer.

All materials presented during Capital Markets Day can be found here: Capital Markets Day 2022 | Volvo cars

Volvo Cars in 2021

Volvo Car Group recorded an operating profit of BSEK 20.3. Sales in 2021 totaled 282.0 BSEK while global sales reached 698,700 cars.

About the Volvo Car Group

Volvo Cars was founded in 1927. Today it is one of the most well-known and respected car brands in the world, selling to customers in more than 100 countries. Volvo Cars is listed on Nasdaq Stockholm, where it trades under the ticker “VOLCAR B”.

Volvo Cars wants to offer its customers the freedom to move in a personal, sustainable and safe way. This is reflected in its aspiration to become an all-electric automaker by 2030 and its drive to continually reduce its carbon footprint, with an aspiration to be a carbon-neutral company by 2040.

In December 2021, Volvo Cars employed around 41,000 full-time employees. Volvo Cars headquarters, product development, marketing and administrative functions are mainly located in Gothenburg, Sweden. Volvo Cars production facilities are located in Gothenburg, Ghent (Belgium), South Carolina (USA), Chengdu, Daqing and Taizhou (China). The company also has R&D and design centers in Gothenburg, Camarillo (USA) and Shanghai (China).

Keywords: Corporate News, EX90Descriptions and facts in this press material relate to Volvo Cars’ international vehicle range. The features described may be optional. Vehicle specifications may vary from country to country and are subject to change without prior notice.