Volvo Q2 Profit Halves on US Truck, Battery-Electric Weakness
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Volvo Group profit and revenue sagged in the second quarter of 2025, largely as a result of weak demand for trucks in North America and a financial impairment due to softer-than-expected appetite for battery-electric vehicles around the world.
Truck, bus and construction equipment maker Volvo posted a profit of $771 million in the most recent quarter, less than half its $1.6 billion profit in the year-ago period. Volvo reports earnings in Swedish krona and conversions were correct as of July 17.
Revenue at the parent company of Volvo Trucks North America and Mack Trucks decreased 12% year over year to $12.59 billion from $14.36 billion a year earlier.
The company’s revenue from truck sales declined 7% to $8.37 billion in the three months that ended June 30, down 14% from 9.74 billion krona in the year-ago period.
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Gothenburg, Sweden-based Volvo posted an operating margin of 8.1% in the most recent quarter, compared with 14.5% in Q2 2024.
“In a quarter characterized by a general stabilization in the European market and more uncertainty and wait-and-see among customers in North America, the Volvo Group’s net sales decreased by 5% adjusted for currency,” CEO Martin Lundstedt said in a letter to investors accompanying the results.
“The societal transformation to zero-emission vehicles is slower than previously anticipated, and therefore costs of [$460 million] related to compensation for lower battery volume commitments and impairment of some battery-electric assets have had a negative impact on reported operating income,” wrote Lundstedt.
Renegotiated battery delivery contracts saw Volvo pay suppliers $297 million in compensation, of which $195 million was taken against Q2 earnings. The company took a $164 million charge against earnings too on the value of its battery-electric assets.
“Enabling conditions, such as charging infrastructure and stimulus of demand, have not yet been put in place, which we regret. It is time for policymakers, state leaders and other stakeholders to also take action,” Lundstedt warned.
The company sold 52,764 trucks globally in Q2, down 10% from 58,935 trucks in the same period 12 months earlier.
In the first six months of 2025, Volvo sold 101,597 trucks, a decrease of 11% from 114,405 trucks a year earlier.
“Demand in North America has been weak in the wake of uncertainty surrounding both tariffs and the EPA 2027 emissions regulations, and we are in the process of reducing production capacity there to adapt to the lower demand,” said Lundstedt.
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Lundstedt said April 23 that VTNA and Mack would lay off 1,000 staff at manufacturing plants in the U.S.
Volvo peers Traton Group and Daimler Truck have also laid off or are about to lay off employees in North America because of soft demand for Class 8 on-highway vehicles.
Daimler Truck North America will lay off 2,000 production staff “temporarily,” with only an upturn in orders auguring a return to work for those employees. The parent company of Class 8 truck brands Freightliner and Western Star sold 38,580 trucks and buses in Q2, down 20% from 48,246 a year earlier.
North America’s over-the-road freight market is in a recession due to lower freight volume and rates, but the vocational market is “relatively better,” Volvo Group said. President Donald Trump’s introduction of tariffs and uncertainty regarding the Environmental Protection Agency’s 2027 emissions standards have led U.S. customers to adopt a wait-and-see approach, it added. Overall, industrywide heavy-duty truck retail sales in North America through the end of June were down 6% at 135,723, compared with 145,056 in the first half of 2024, according to Volvo. Volvo’s sales in North America decreased by 20% to 12,981 trucks from 16,234.
VTNA sales dived 43% year over year to 4,988 trucks from 8,779 in Q2 2024. Sales at Mack rose 6% to 7,940 trucks from 7,475 in the year-ago period.
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Order intake in North America across the two brands decreased by 16% to 8,243 trucks due to the wait-and-see stance of carriers, the parent company said. VTNA’s orders rose 29% to 4,131 trucks from 3,193 in the year-ago period. But Mack’s orders in the region in the most recent three-month period totaled 4,080 trucks, a 38% slump from 6,556 a year earlier.
VTNA’s North American heavy-duty truck market share was 7.6% in Q2, down from 9.5% as it revamped its on-highway lineup, while Mack’s market share rose to 7.2% from 6.1% on the back of an improved supply chain and good vocational demand.
Volvo Group paid $40 million in October 2024 to bring all of Mack’s cab assembly in-house after buying Commercial Vehicle Group’s Kings Mountain, N.C., plant.
VTNA’s on-highway lineup saw a redesign of its flagship VNL tractor as well as the regional haul VNR tractor.
Those two launches plus a revamp of Mack’s on-highway products, with the launch of a new flagship on-highway tractor — the Pioneer — and a repositioning of its Anthem predecessor to the regional haul market, are the engines for a market share power grab.
At Volvo Group’s 2024 Capital Markets Day in Dublin, Va., company executives rolled out plans for 25% North American heavy-duty truck market share by 2030.
