Obwohl ich es ungern zugeben muss, hat die Entlassung von 3.000 Mitarbeitern bei Volvo tatsächlich Wirkung gezeigt.

As soon as Volvo released its first - fiscal - year quarterly report, the Polestar owner sitting across from me suddenly sat up straight.

He kept muttering things like “Oh, the EX30 can really make money” and “The Swedes love environmental friendliness” to himself.

But the smartphone co - developed by Polestar and Meizu in his right hand reflected the Rolex watch on his left hand. He was as green as the rising Volvo stock on the screen.

Volvo, once a luxury brand that won over many elites, has recovered after half a year of decline.

Last week, Volvo released its business reports for the third quarter of 2025. The sales volume reached 160,514 vehicles, representing a year - on - year decline of 7% and a quarter - on - quarter decline of 11.6%.

The decline in sales volume also led to a drop in revenue. 86.4 billion kronor was 6% lower than the previous year. There had already been a decline of over 5% for two consecutive quarters, and the negative trend doesn't seem to stop.

But the other financial data still looks encouraging. The adjusted operating profit was 6.4 billion Swedish kronor, a 10% increase compared to the previous year. The profit margin rose from 17.7% in the previous quarter to 24.4%, and the return on earnings before interest and taxes rose to 7.4%. The profitability has improved.

One must consider that Volvo was able to achieve a profit increase despite falling sales volume, and the profit margin has risen significantly. This means that Volvo either has its costs under control or makes more profit per vehicle than others.

In the second quarter of this year, the sentiment around Volvo was still very negative. Now, Volvo has presented a balance sheet that completely deviates from the analysts' forecasts, and the stock prices have soared.

So what did Volvo do to “come back from the dead”?

It seems that the “cost - reduction program” from the second quarter is now showing results.

In April this year, Volvo released what seemed to be good business reports for the year 2024. The sales volume reached a record high in Volvo's history (763,400 vehicles), and the revenue rose to 400.2 billion Swedish kronor, exceeding the 400 - billion mark for the first time.

But in fact, Volvo only looked good on the surface, while the internal situation was not so rosy.

The reason is related to the aggressive strategy of the former CEO Jim Rowan.

This man, who switched from Dyson, strongly promoted the digitalization and electrification of automobile sales and generously invested in renewable - energy start - up companies such as StoreDot (fast - charging technology) and Northvolt (batteries).

But he forgot that as a multinational automobile company, Volvo must consider the needs of different countries, and he didn't foresee the risks from geopolitical factors.

Finally, Volvo was in a difficult position between China and the United States. The market for combustion engines shrank, and the development of pure electric vehicles couldn't be consistently promoted. So the whole year of 2024 went from a good start to a low point.

In the first quarter of 2025, the net profit dropped from 4.7 billion kronor in the same quarter of the previous year to 1.9 billion, a plunge of 50%. In the second quarter, the vehicles couldn't be sold in the United States due to the increased tariffs, leading to a write - off of 11.4 billion kronor. The financial situation looked worse than ever.

When the situation looked bad, Volvo had to re - hire the former CEO Hakan Samuelsson.

The old fighter took on the task in the crisis and quickly presented the “cost - reduction program”, which, in short, was about layoffs.

According to official information from Volvo, the layoffs of 3,000 employees mainly affected office workers. First, 1,200 employees were laid off at the Swedish headquarters, and the remaining 1,800 or more employees were distributed in branches worldwide.

We're familiar with this kind of radical reform during a corporate crisis. The legendary CEO Carlos Ghosn, who saved Nissan, and Carlos Tavares, who led Stellantis out of the crisis, both carried out layoffs.

And this measure has actually shown results quickly. The third - quarter business reports show that after the layoffs, the sales costs decreased by 1.43 billion kronor, the administrative expenses by 0.92 billion kronor, and the salary and social benefits by 1.29 billion kronor. Volvo's financial situation has improved.

The sharp rise in stock prices is also the reaction of shareholders.

But just like with Nissan and Stellantis, which we mentioned earlier, while layoffs can help in the short term, if the company's R & D capacity is damaged by the layoffs, it will only lead to cost - cutting but also end up being a pyrrhic victory.

Now, the real test for Hakan and Volvo begins.

One can clearly see that Volvo's sales volume is constantly declining, and all the existing models have their own problems.

The station wagons are well - rated but poorly sold. Even if the V90 is removed from the program, the sales volume doesn't recover. Those who like it can't afford it, and those who can afford it have better alternatives. The once - star in Europe, the EX30, is affected by the tariffs between China and Europe, making its prices uncompetitive.

The newly - revised XC60 is more like old wine in new bottles, without any significant innovations. The sales volume only increases slightly compared to the previous year.

The long - awaited EX90 has been postponed again and again since 2023. Only now has the supply - chain problem been solved, but now the tariffs between China and the United States are looming, and its future is uncertain.

If Volvo doesn't come up with something new soon, the more than 40,000 employees won't last long for further layoffs.

During the balance - sheet conference, they recognized this. The existing information shows that Volvo intends to, on the one hand, utilize the research results achieved in recent years and, on the other hand, strengthen the cooperation with Geely to turn the situation around.

Looking at Volvo's R & D investments, it has developed the SPA3 platform, its own electric motors, two new factories, CTB technology, and large - scale die - casting in recent years. New models are also coming out one after another.

It will further expand the cooperation with Geely to reduce material costs through joint procurement and develop new models for the Chinese market.

Obviously, the XC70 released in September is a result of this strategy.

When I saw this car, I felt that Volvo had finally got the right idea.

At first glance, one can't tell much from the outside and the interior. After all, the XC70 is a global model and has to consider the minimalist preferences of Northern Europeans.

But the equipment is on par with the new market entrants. Everything one needs is there: electric seats, a 360° panoramic camera, over a hundred kilometers of pure - electric range, an L2+ assistance system...

These equipment improvements are as “Chinese - style” as those of the Audi E5 Sportback, Nissan N7, and Toyota BZ3X.

Of course, this isn't bad. The unique aesthetics of an established automobile manufacturer combined with rich equipment is a real plus for us consumers.

Source @Yuan Qicong

The cooperation between Volvo and Geely is different from that of Audi and Nissan, which only adapt their platforms. Volvo has thought about the drive technology.

For example, the 3 - speed DHT of the XC70 uses a P1 + P2 + P4 electric - motor concept, in contrast to the P1 + P3 + P4 concept of its sibling model, the Lynk & Co 08 EM - P.

The most important reason for this is safety.

The “P” stands for “position” and refers to the position of the electric motor in the drive system.

By replacing P3 with P2, the space between the transmission output shaft and the drive shaft is freed up. In an accident, there is more space for shock absorption.