We just released our 2022 Annual and Sustainability Report! In it you can find a detailed overview of our company’s performance over the past year and a roadmap of our future strategy.

The report in its entirety is available <a href="https://investors.volvocars.com/en/financial-information/results-centre">here</a>, but before you dive into the full report, here are some of the interesting things to know from our 2022 Annual and Sustainability Report.
<ul>
<li>We had our highest reported revenue in company history. Our operating revenue reached 330.1 bn SEK, up 17 per cent compared to the previous year. The regional revenue split is China ~71 bn, US ~62 bn, Europe ~144 bn and other markets ~53 bn.</li>
<li>Climate neutral energy is powering more of our manufacturing with 66 per cent of the energy used in our manufacturing operations coming from a climate neutral source.</li>
<li>We have just over 43,000 employees around the world: ~2,000 in North and South America, ~29,000 in Europe, ~12,000 in Asia and ~100 in other countries.</li>
<li>The publishing of the report is the first public appearance of our revitalised purpose statement and our company Blueprint that we launched companywide in February. </li>
</ul>

<ul><li>33 per cent of our cars sold were Recharge models – with 11 per cent being fully electric and 22 per cent as plug-in hybrids. Out of our sales for 2022 globally, XC60 was our highest selling model last year followed by XC40 and XC90.</li>
<li>At the end of last year, we had Tech Hubs in three locations around the world: Bangalore, India and two Swedish locations in Lund and Stockholm. We have also announced our plans to open a fourth Tech Hub in Krakow, Poland this year. </li>
<li>Our total CO2 emissions per vehicle continues to decline, now down 15 per cent in our per vehicle emissions since our baseline in 2018.</li>
<li>Water usage in our manufacturing is dropping year over year, with our usage rates down 30 per cent from our baseline in 2018.</li>
<li>Our retail network currently covers approximately 2,500 retailers around the world, organised by 22 National Sales Companies and 44 importers. Meeting our consumer expectations, we are rolling out a new go-to-market model based on strong digital platforms and direct consumer relationships.</li>
<li>The Annual & Sustainability report is 205 pages long and has two main sections. The ‘front’ (pages 1-46) tells our story, and the ‘back’ is all about our numbers as well as the Risk & Governance and our Sustainability report.</li></ul>

The top ten things to know from our Annual and Sustainability Report 2022

On his first day as the CEO of Volvo Cars, Jim Rowan shares his thoughts on his new role, company culture and the future of automotive industry.

Hej everyone,
A new chapter in my life starts today. And it’s one that I’m incredibly excited about. To be able to join Volvo at this moment in time, in the middle of an enormous transformation, is very inspiring.
So when people ask me, “Why did you join Volvo?”, that’s my answer. I’m just really inspired by the opportunity. To be part of our shared journey in the coming years, to work with you all and create a company that is a leader in next-gen mobility, and take the company to new heights is something I really look forward to.
While I’m a lover of engineering and technology, I’m not a traditional automotive guy. I think that’s a good thing. Volvo is full of people who know the automotive industry inside out and have all the relevant skills. You don’t need me for that!
What I hope to bring to the table are insights and experience from the high-technology consumer products industry, as we make that transition to next-gen mobility. If we blend that with the talent and knowledge that we’ve built up within Volvo over the last 95 years, and put it together in the right way, I think it will be an extremely powerful combination.
We’ll always have our history and our pedigree. People trust the Volvo brand and know that it stands for something authentic and honest. No one can replicate that. But the language and expectations of next-gen automotive are changing. It used to be all about horsepower and cylinders. Now, it’s becoming much more about embedded technology that makes things easier and more convenient for our customers. The language has become much more inclusive and progressive, which is good.

Our purpose says it very well: we want to offer people the freedom to move in a safe, sustainable and personal way. Taking mobility carbon-free and being responsible for that transition is extremely motivating. It’s not just the right thing for Volvo, but more importantly, it is the right thing for society.
This is our moment to demonstrate that we take human safety as seriously as we take planetary safety. Two things that have never been more important and in which we will continue to do even more. Our approach to 100% electrification and a safe introduction of autonomous drive has engaged the whole company and we will achieve it, together. But in next-gen automotive, I also think the personal element will be more important than ever. Direct connection to our customers will become a huge enabler for sustained, profitable growth and additive to our brand value.
When you buy a Volvo or subscribe to one, you’ll still get a robust, reliable, safe, high-quality car. That won’t ever change: we’ll continue to invest and innovate in all of the core competencies that we’ve built over several decades. However, if we add to that an all-inclusive and seamless Volvo experience for our customers, we can make it their brand of choice throughout their lives. Mobility that not just protects you, your loved ones and the environment, but also gives enjoyment, convenience and complete peace of mind.
Finally, just a few words about our culture. Trust is important to me. I’d like this to be a company that trusts its people to do their job, a culture that provides equal opportunities to all, where our people are empowered to use their judgment and skills to help deliver our key objectives.
It also means that we’re a company that has earned the trust of its people. A company that’s here for you when you need support, whatever it is. And if something’s about to go wrong, I want everyone to feel confident to speak up and ask for help and guidance to solve the issue at hand. We will win as a team: no finger pointing, no blame game, let’s just get everyone focused on the mission.
Anyway, enough talk for now. You may have to be a bit patient with me in coming weeks as I get up in the saddle, but I plan to visit all our operations and get up to speed quickly. I look forward to meeting you and starting off this adventure together with you.
Jim

A letter from our new chief executive Jim Rowan: we will win as a team

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’re listing our company on the Nasdaq stock exchange in Stockholm – a historical moment for Volvo Cars. 

Our new chapter will begin with the official bell-ringing ceremony, followed by a variety of media engagements for our chief executive Håkan Samuelsson and other members of our Executive Management Team. In those interviews, they’ll explain in more detail how we’ll use the proceeds of the listing to support and strengthen our abilities to deliver on our ambitious plans for the future.

If you want to follow the development of our listing, you’re welcome to visit the Investors section of our website. 
<a href="https://investors.volvocars.com/en">Visit investors</a>

IPO process: today we’re making history!

Give a warm welcome to Olivia Ross-Wilson, who will lead our global communications starting in December.

From one Swedish icon to another – Olivia Ross-Wilson joins us as our new head of global communications fresh off a ten-year spell with IKEA. There she started as head of sustainability communication in 2011, before becoming head of communications for Ingka Group (the biggest of the twelve franchisees that operate IKEA stores) in 2016.
As the head of communications at Ingka Group, Olivia is a member of the leadership team and leads a team and matrix of over 300 people across 30 countries. Her responsibilities include the strategic long-term positioning of IKEA, as well as leading the communication across areas including key brand marketing activities, PR, internal communication, public affairs, in-house production and strategic business communication, to name a few.
“As a long-term fan and customer of Volvo, I am super excited to be joining the company,” Olivia said. “The world needs brands and companies like Volvo to thrive for the future, so I look forward to contributing however I can to the company’s inspiring journey and to the success of the electrification strategy.”
Before joining IKEA, Olivia worked in various PR and marketing roles in London between 1998 and 2009, including for the retailer Marks &amp; Spencer and agency side for brands such as Starbucks, Delta Airlines and Carlsberg. During this time she also founded her own communication consulting company, advising clients such as Coca-Cola and Mulberry.
In 2009, she moved to New York and joined the Clinton Foundation and Bloomberg Philanthropies, organisations led by former US President Bill Clinton and Mike Bloomberg, as the global communications director for the Clinton Climate Initiative. In this role, Olivia was in charge of global strategic communication, including branding, PR, donor marketing, digital communication and events.
“We want to give our warmest welcome to Olivia,” said Hanna Fager, head of corporate functions. “She is a modern leader with a deep and wide-ranging understanding of strategic communication, bringing valuable experience as we move towards becoming a leading premium electric car company. To cap it all, she knows the ins and outs of working with a brand that, similarly to us, has a rich Swedish heritage and creates products that are part of people’s everyday life all over the globe.”
Olivia takes over the role after Nikki Rooke, who left the company during the summer having chosen to pursue new opportunities in the UK, after leading our global communications operations since 2019.
“We would like to thank Nikki for her contributions to our continued success and I wish her all the best in her future endeavours,&quot; said Hanna Fager.

Meet our new head of communication

A shortage of material continues to challenge the auto industry, and we’re not an exception. Troubles aside, we have an all-time high to report – and it’s about our Recharge cars!

We were probably all ready to retire the phrase ‘an unusual year’ after 2020, but it seems like we can’t shake it just yet. Earlier this year, we were in full swing, reporting sales growth and setting new records, month after month. This month, overall numbers aren’t quite as positive as in the first half of the year, but we still have an all-time high for you – so let’s look at our Recharge sales.
They’ve been going strong this year, and that momentum keeps building: in August, they accounted for 24.2 per cent of all cars sold in the month. And in Europe, a whopping 47 per cent of all cars sold in the region were from the Recharge line-up, which is the biggest share we’ve reported so far. Our chargeable models proved especially popular in the Netherlands, the UK and Belgium this month, as they were the top contributors to our increased Recharge sales in Europe.
For our global sales we reached 45,786 cars in August, a 10.6 per cent decrease compared with the same period last year. But it’s not due to a lack of interest – we still see that the overall underlying demand in the auto industry, and for our cars, remains very robust.
The main reason for the decline is material shortage: since mid-July, supplier shut-downs due to Covid-19 in South East Asia, especially in Malaysia, has worsened an already strained supply situation. These material shortages have led to temporary production halts at our facilities in Sweden, Belgium, China and the US, with reduced production volumes as a result.

Our current expectation is that, for the second half of 2021, it will be challenging to match the volume levels we achieved during the same period in 2020. This will of course have an impact on our revenue and profit, but <a href="https://investors.volvocars.com/~/media/Files/V/Volvo-Cars-IR/results-center/2021/volvofirsthalfyear2021report.pdf#page=14">our outlook for the full year 2021</a> still remains.
When it comes to our three key regions, the US is the only one with an increase last month. Here, customers particularly fancied the XC90, which led this month’s sales charts, followed by the XC60. Despite a strong underlying demand and order intake, China reported a double-digit decrease in August, as did Europe – the main reasons being the previously mentioned Covid-19 outbreaks in South East Asia, material shortage and lowered production volumes.
All this means that for the first eight months of the year, we’re now at 483,426 cars sold all around the globe – an increase by 26.1 per cent compared with the same period last year.
See a detailed break-up of regional sales below:
<table>
<col style="width:13.51%" />
<col style="width:13.51%" />
<col style="width:13.51%" />
<col style="width:13.51%" />
<col style="width:16.22%" />
<col style="width:16.22%" />
<col style="width:13.51%" />
<tbody>
<tr>
<td></td>
<td>August</td>
<td></td>
<td></td>
<td>January-
August</td>
<td></td>
<td></td>
</tr>
<tr>
<td></td>
<td>2020</td>
<td>2021</td>
<td>Change</td>
<td>2020</td>
<td>2021</td>
<td>Change</td>
</tr>
<tr>
<td>Europe</td>
<td>17,493</td>
<td>13,052</td>
<td>-25.4%</td>
<td>169,427</td>
<td>202,282</td>
<td>19.4%</td>
</tr>
<tr>
<td>China</td>
<td>15,835</td>
<td>13,112</td>
<td>-17.2%</td>
<td>95,986</td>
<td>122,914</td>
<td>28.1%</td>
</tr>
<tr>
<td>US</td>
<td>10,378</td>
<td>10,686</td>
<td>3.0%</td>
<td>63,330</td>
<td>86,015</td>
<td>35.8%</td>
</tr>
<tr>
<td>Other</td>
<td>7,533</td>
<td>8,936</td>
<td>18.6%</td>
<td>54,749</td>
<td>72,215</td>
<td>31.9%</td>
</tr>
<tr>
<td>Total</td>
<td>51,239</td>
<td>45,786</td>
<td>-10.6%</td>
<td>383,492</td>
<td>483,426</td>
<td>26.1%</td>
</tr>
</tbody>
</table>

August sales: all-time high for our Recharge cars!

August sales: all-time high for our Recharge cars

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

Volvo Cars is acquiring additional shares in the joint ventures Daqing Volvo Car Manufacturing and Shanghai Volvo Car Research and Development.

Volvo Cars has made a deal to buy out our parent company Geely Holding’s stake in our joint ventures in China, with the aim of taking full ownership of our car manufacturing plants and sales operations in the country.
“With this agreement, Volvo Cars will become the first major non-Chinese automaker with full control over its Chinese operations,” said Håkan Samuelsson, chief executive of Volvo Cars.
By acquiring an additional 50 per cent of the shares in the joint ventures (Daqing Volvo Car Manufacturing and Shanghai Volvo Car Research and Development), we will strengthen our position in China, which is our largest market, and maximise exposure to one of the fastest growing regions globally.

Although the two joint ventures are already fully included in Volvo Car Group’s financial statements, our share of their net income and equity will increase after this transaction.
“Geely Holding Group and Volvo Cars are continuously evaluating the best way to collaborate and structure operations within the wider Group,” said Geely Holding chief executive officer, Daniel Donghui Li. “These two transactions will create a clearer ownership structure within both Volvo Cars and Geely Holding.”
Our company has grown significantly faster than the average market in China in recent years and we will continue to invest in the country to keep that momentum going. Once the transactions are done, we will have full ownership of our manufacturing plants in Chengdu and Daqing, our national sales company in China and our R&amp;D facility in Shanghai.

The transactions, which are pending regulatory approvals, will be completed in two steps, starting in 2022 when the joint venture requirement for auto manufacturing in China will be lifted. They’re expected to be formally completed in 2023.
Employees and partners within the relevant companies will not be directly affected by the transactions, and financial details will not be disclosed.

Volvo Cars to take full control of its Chinese operations

We want to be a premium fully electric car company by 2030 – so what do we need to aim for by mid-decade to keep us on track?

We’re ambitious and we continually challenge ourselves. The global automotive industry is changing, and we want to lead that change by being the fastest growing premium electric brand and the fastest transformer. We want to lead in safety, core computing, electrification, autonomous drive technology and direct customer relations. This way we will provide our customers with the freedom to move in a personal, sustainable and safe way.
By the middle of this decade we aim to sell 1.2 million cars globally, with at least half being fully electric cars. Of those annual sales half should also come via online channels, including volvocars.com. This way we can establish millions of direct customer relationships, together with our strong retail partners. By 2030 we aim to sell only fully electric models.
We will continue to focus on developing the next level of safety and autonomous drive standards. Our future models will benefit from core computing power and over-the-air upgrades of software, 50 per cent of which should be developed in-house by mid-decade. In addition to in-house development of technology and software, we will continue to build existing and new strategic partnerships with global technology leaders.
We also expect to improve our performance thanks to synergies from collaboration with our sister companies within Geely Holding. By jointly developing new technologies, we can deploy them faster and bring about quicker development cycles. Working together with our sister brands is also expected to generate lower procurement costs, shared development costs and other economies of scale.
All these ambitions reinforce our commitment to reduce average CO2 emissions per car by 40 per cent between 2018 and 2025, a first step towards our ambition of becoming a fully climate neutral company by 2040. We also aim to save 1 billion SEK annually by mid-decade through using circular-economy business principles, as well as cutting carbon emissions by 2.5 million tonnes.

Financially, we target an annual operating margin of 8-10 per cent by mid-decade, driven by increased sales and revenues across all three global sales regions, more effective sales and distribution channels, synergies with our affiliates and a broader range of fully electric cars. We expect to further boost profitability by achieving gross margin parity between our electrified and combustion engine-powered cars by mid-decade.

Our mid-decade business ambitions

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