Volvo Car expects 2H sales to strengthen on Europe, US growth

Volvo Car Corp. expects significantly stronger sales in the second half of 2026, driven by growth in Europe and a recovery in the US, while China remains a drag on the Swedish automaker's global outlook.

The Gothenburg-based company, a unit of China's Geely Holding Group, issued the forecast in a statement Thursday, the Wall Street Journal reported. The automaker cited improving demand trends in Europe and early signs of a US rebound as the basis for its optimistic outlook, without disclosing specific sales targets or financial projections.

The forecast comes as Volvo Car navigates a diverging global auto market. Europe has seen a gradual recovery in EV demand after a sluggish period, supported by expanding charging infrastructure and government incentives. The US market is showing signs of stabilizing after a period of inventory correction and cautious consumer spending. China, Volvo Car's third major market, continues to present challenges as an intense price war and slowing economic growth weigh on consumer spending across the auto sector.

The outlook matters because Volvo Car is one of the few traditional automakers that has committed fully to an electric future, targeting an all-EV lineup by 2030. A stronger second half would validate that strategy and provide a template for legacy automakers navigating the EV transition. The company's next quarterly update, expected in the coming weeks, will provide concrete delivery numbers to back the forecast.

Europe Leads the Recovery

Volvo Car's European business, its largest market, is benefiting from a growing lineup of electrified models. The EX90, a full-size electric SUV, and the EX30, a compact electric crossover, have strengthened the company's product portfolio in a region where EV adoption continues to gain traction. European EV sales have been recovering after a period of policy uncertainty and range anxiety concerns, with several countries extending purchase incentives.

US Market Shows Signs of Life

In the US, Volvo Car has invested in local production at its Ridgeville, South Carolina plant, which builds the S60 sedan and the Polestar 3 electric SUV for the Polestar brand. The US market has been navigating a period of elevated inventory levels and price competition, but early signs of a rebound are emerging as consumer confidence improves and interest rate expectations shift.

China Remains a Challenge

China presents the biggest uncertainty for Volvo Car's outlook. The company faces intense competition from domestic EV makers such as BYD and Nio, which have been aggressively cutting prices and launching new models at a rapid pace. The broader Chinese economy has been grappling with a property sector downturn and weak consumer sentiment, creating a difficult environment for foreign automakers. Volvo Car's China sales have been under pressure as local brands continue to gain market share.

Investment Implications

Volvo Car's forecast carries implications for its parent company Geely and the broader European auto sector. A successful second-half recovery would signal that traditional automakers can compete in the EV transition against pure-play EV companies. The company's ability to execute on its electric strategy while managing cost pressures will be key for investors assessing the sector's outlook.

This article is for informational purposes only and does not constitute investment advice.