Volvo Cars broke all previous records in calendar year 2023 and reported its highest-ever full-year sales, revenues, and operating profit in its 97 years of existence.
With 708,716 automobiles sold, a new all-time high, revenues for the full year 2023 increased by 21% to SEK 399.3 billion. With joint ventures and associates excluded, the underlying operating profit of SEK 25.6 billion is 43% higher than in 2022, while the operating margins increased to 6.4% from 5.4% in 2022.
The company had one of the greatest global sales volumes of any legacy premium manufacturer in 2023 with 113,419 fully electric cars shipped, up 70% from 2022 and accounting for 16% of total sales. Volvo Cars saw a 34% growth in its global electric market share from 2022 to 2023.
The company’s electric sales share is still based on just two completely electric models, which does not account for the potential of the next EX30 small SUV, EX90 large SUV, or EM90 MPV—all of which are scheduled to go on sale in 2024.
Related: Volvo to Cease Funding Polestar, Give Control to Geely
Gross profit margins for Volvo Cars’ electric vehicles increased fourfold to 13% in the second half of 2023 compared to the end of 2022. The company’s margins were significantly impacted by high lithium prices in 2022, but when reduced lithium prices and the effects of higher pricing became apparent in the second half of 2023, the underlying profitability of these automobiles clearly increased. The company profited from its own investments’ efficiencies as well.
Even though the EVs’ gross margins are still lower than those of some of its internal combustion engine (ICE) vehicles, this difference is narrowing. The corporation is getting closer to its target with the EX30, which is expected to yield gross margins of 15-20%. Additionally, Volvo Cars anticipates that the EM90 and EX90 will help to narrow the margin difference between ICE and EV vehicles.
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