The excessive enthusiasm of manufacturers for electric cars is seeing many brands, both Western and Eastern (from Ford to Honda), licking their wounds for the large amounts of money perhaps invested too lightly in a technology so far ignored by the market. However, no one has gone further than Volvo, the Swedish company long in the hands of the Chinese Geely, which has truly put the proverbial cart before the horse by disposing of its plants that produced combustion engines.
DISUSED OR CONVERTED ENGINE FACTORIES
The problem is that, as is well known, the combustion engine still sells. And this means that Volvo, to avoid seeing its volumes collapse, is keeping variants equipped with old propulsion systems on the market beyond expectations. But it is no longer currently able to produce other engines, in case the stalemate on electric cars should continue.
Attention, these are not press rumors: what has been described so far was admitted by Volvo itself (specifically by Anders Bell, head of the engineering department of the Swedish manufacturer) to the specialized outlet CarBuzz during a test drive of its electric EX60 crossover.
The Northern European company risks paying an industrial gamble that was structured based on projections that turned out to be completely wrong, since the European Commission itself – probably the political body worldwide that has most strongly accelerated on electric cars – had to admit that its Green Deal is no longer feasible and will have to open up to exemptions and substantial modifications.
VOLVO TAKES ON EXTERNAL PARTNERS
It remains to be seen what Volvo intends to do to get out of the impasse. Will it perhaps abandon combustion engines? No. Then will it abandon the markets where old diesel and gasoline engines still sell? Neither. In the interview, the Swedish company shows confidence, recalling that its main market is now represented by Asia and the Old Continent, where the energy transition is underway and will hardly stop.
And when the journalist points out that in the US over 92% of the 121,607 vehicles sold in 2025 were powered by internal combustion engines, Volvo is forced to respond that, in order not to lose that market share, it will be forced to turn to external manufacturers. A fact that raises eyebrows not only among purists (a major manufacturer usually, though not always, produces its own engines) but also among analysts, as it exposes the brand to supply uncertainties, possible tariffs if the supply chain is international, and thus price fluctuations. Especially in a world that is splitting into opposing blocs.
A LOOK AT VOLVO’S NUMBERS
As proof of what has just been said, it is recalled that Trump’s trade tariffs have already cost the Swedes dearly. On April 29, the Northern European car manufacturer announced a 26% drop in net profit for the first quarter of 2026, down to 67 million euros, due to US tariffs and a difficult American market. Revenue decreased by 12%, remaining at 6.7 billion euros. The cost reduction plan continues, which in the first quarter led to savings of 1.4 billion kronor.
The goal is to reduce indirect and variable costs by 5 billion Swedish kronor this year, after completing last year a tough plan of 18 billion kronor which, according to a statement dated May 26, 2025, involved the dismissal of 3,000 employees, mainly in Sweden, equal to 15% of the total office workforce employed globally.
