Our strong sales performance in 2021 has translated into an even stronger financial result. 

It’s no secret that 2021 was a challenging year in many ways. A pandemic that still refuses to be defeated, global supply chain issues caused by a rocky trading environment, a lack of semiconductors; we've definitely had easier years in the car industry and in our company.
Nevertheless, we performed strongly in the face of that adversity. We recorded a solid sales increase for the full year, delivering just short of 700,000 new Volvos to customers and increasing market share.
Today we report that financially, we’ve also done very well. As a matter of fact, we’ve set a record in terms of both revenues and profitability for a full calendar year.
Our global revenue came in at SEK 282 bn, an increase from SEK 262.8 bn in 2020, while the operating profit for 2021 amounted to a healthy SEK 20.3 bn, compared to SEK 8.5 bn in 2020. The resulting profit margin is 7.2 per cent, which is close to our mid-term target of consistently achieving an 8 to 10 per cent profit margin.

“I would like to take this opportunity to thank all employees for a great effort and for all we have achieved together,” says our CEO Håkan Samuelsson. “Through collaboration and determination, we’ve made tremendous progress over this last decade. We’ve placed Volvo Cars firmly on the map as a brand that is leading mobility into the future in a safe, sustainable and personal way, showing it is possible to be both profitable and more sustainable.”
Of course, such strong financial results also have a positive impact on our Volvo Bonus programme, as head of Corporate Functions Hanna Fager and our CFO Björn Annwall reveal in the film above. All Volvo Cars employees will receive a bonus this year and the payout level will be a record 200 per cent of the annual bonus target.
This is a deserved reward for all staff after a year of hard work.
To read the press release, please <a href="https://www.media.volvocars.com/global/en-gb" target="_blank"> click here </a>

FY 2021 financial results: all-time high revenue and profitability

Today we celebrate our best half-year results in terms of sales and operating profit in our 94-year history.

We had a record first six months in terms of sales, driven by strong demand for our SUVs and our Recharge-badged electrified cars. Today, we’re happy to report that our strong performance has also translated into a strong financial result.
To briefly recap our sales in the first half: we sold 380,757 cars around the globe. This was the best half-year performance in our history. It’s an increase of 41 per cent compared to the pandemic affected period in 2020 – and the company also saw strong growth of 12 per cent compared to the first six months of 2019 – a more relevant comparison without the pandemic disruption. Our 12-month rolling sales volume is approximately 775,000 cars, just shy of the 800,000 target we set 10 years ago.
Selling all those new cars generated revenue of 141 billion SEK, an increase of 26.3 per cent. Those better sales and revenues also translated into a higher profit, which was boosted further by cost efficiencies and positive results at our affiliated companies. The operating profit of 13.2 billion SEK is the best we ever reported for a financial half year. The operating margin came in at 9.4 per cent.
Not everything went our way: the global shortage of semiconductors posed a challenge to us in the first half. But we adapted production and shifted priorities in line with customer demand in all plants, which meant that we could reduce the impact on customer deliveries.
“The company continued to grow strongly despite the industry-wide semiconductor shortage, but more importantly, we demonstrated that we are a leader of the ongoing transformation in the automotive industry,” said Håkan Samuelsson, chief executive of Volvo Cars.

Throughout the first half we also took additional steps towards our all-electric future. Recharge cars are now a quarter of our global volumes, and that makes us the leader among traditional premium car makers when it comes to share of sales for chargeable cars.
As part of the move towards full electrification, we launched our second fully electric model, the Volvo C40 Recharge. At the same time, we firmed up our strategy of online sales to meet changing consumer behaviour. From now on, all fully electric models will be available exclusively through volvocars.com, and customers can order at their place of preference; from their home, at a Volvo studio, or together with a retailer. We are now operational with online sales in several markets, with transparent and flexible consumer offerings including care packages of service, wear and tear, as well as insurance. Volvo Cars’ subscription offering, Care by Volvo, had a fivefold increase in the first six months to over 10,000 contracts.
Securing sustainable batteries is key for our company’s transformation. Volvo Cars is therefore planning to join forces with Northvolt as a strategic partner for joint development and manufacturing of next generation battery cells.
To ensure focus on electrification, we’re also carving out our internal combustion engine operations into a new unit, Aurobay, in which Geely Holding will be a main shareholder. Through Aurobay, Volvo Cars will realise synergies as well as secure a supply of competitive combustion engines for our hybrid powertrains until our company is fully electric.
In May, our Board announced that it is evaluating a possible initial public offering (IPO) on Nasdaq Stockholm. The evaluation process continues.
Håkan Samuelsson said: “Volvo Cars has a decade-long track record of successful transformation. The car industry is changing more than ever and we have a strong determination to be the fastest transformer.”

2021 half-year financial results – record performance

If we are to become a fully electric car maker, we’re going to need a lot of high-quality batteries. Which is why we’re now teaming up with fellow Swedish innovators Northvolt.

By now you all know this: we are heading full speed towards an all-electric future. By 2025, half of our global sales volume will be fully electric Volvos, and by 2030 we aim to offer only pure electric cars to our customers. One crucial component we need to reach those ambitions? Battery cells – which is why today's announcement is so important for our future.
We're teaming up with Northvolt, a leading battery firm from Sweden, to develop and produce high-quality sustainable batteries for the next generation of pure electric Volvo and Polestar cars. An all-Swedish battery powerhouse, if you will, with collaboration that contains several elements.
For example, as part of the plans we'll establish a 50/50 joint venture company, which will include an R&amp;D centre in Sweden that is scheduled to kick off operations next year. Here, we intend to develop state-of-the-art battery cells and related technologies, to make sure that the battery technology is tailor-made and can be seamlessly integrated into those shiny new Volvos and Polestars.

&quot;Developing the next generation of battery cell technology in-house, together with Northvolt, allows us to design batteries specifically for Volvo and Polestar drivers,&quot; explains Henrik Green, our chief technology officer. &quot;With cells developed in-house for our electric cars we can focus on giving Volvo and Polestar customers what they want, such as range and short charging times.&quot;
But that's not all. Together with Northvolt, we also look to establish a new, Europe-based gigafactory with a potential production capacity of 50 gigawatt hours (GWh) per year. We've yet to determine where exactly this plant will be based, but production is scheduled to start in 2026 and the plant will employ around 3,000 people. Even better: it is planned to be powered 100 per cent by clean energy!
Finally, our collaboration with Northvolt also means that from 2024, Volvo Car Group will source 15 GWh of battery cells per year from the existing Northvolt Ett battery plant in Skellefteå, Sweden. Alongside previously announced battery supply agreements, that means we've now secured the European battery cell needs that will drive our ambitious electrification plans.

&quot;By working with Northvolt we secure a supply of the highest quality, sustainable battery cells for our pure electric cars,&quot; said Håkan Samuelsson, our chief executive. &quot;Working closely with Northvolt also allows us to strengthen our in-house development capabilities.&quot;
Our partnership with Northvolt also supports our wider sustainability ambitions as a company. Today, the production of batteries for our fully electric cars represents a large part of the total lifecycle carbon emissions of those cars. By working with Northvolt and producing batteries near our car manufacturing plants in Europe, we can reduce the environmental footprint related to battery sourcing and production.
See all the content from our recent Tech Moment, that explains how we’ll achieve our all-electric future.

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FY 2021 financial results: all-time high revenue and profitability

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2021 half-year financial results – record performance