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

The Ocean Race 2022 – 23 will see teams of intrepid ocean explorers embark on a 32 000 nautical mile yacht race around the world, visiting nine stunning countries over six months.

It’s not a journey to be taken lightly, which is rather ironic, given that the first ever Ocean Race back in 1973 was born out of a bet in a pub.
In the late 90s, though, it was bought by the Volvo Group (which at the time included Volvo Cars) who hosted the iconic race until 2018, when we stepped down as owners. Despite that change in ownership, Volvo Cars’s commitment to the race remains, and the company is proud to be premier partners of the 2023 edition.
Since its inception, The Ocean Race has focused on ocean sustainability, both from the perspective of organising a sustainable event (no small feat for an event of its size and spread), and in terms of the education spread throughout the race. Moreover, Ocean Summits are organised during the stopovers to discuss how to improve ocean health, and the boats themselves are used for scientific ocean health research. This edition will showcase the <a href="https://www.onebluevoice.net/">One Blue Voice campaign</a> to drive support for a Universal Declaration of Ocean Rights. The campaign aims to get public to sign an online petition that will be presented in collaboration with the United Nations General Assembly in New York in September 2023.
The petition will be presented together with a catalogue of draft principles covering clear pathways and actions on how to improve ocean health. These principles are the culmination of <a href="https://www.theoceanrace.com/en/racing-with-purpose/summits-and-policy">12 Ocean Race Summits</a> created to drive change and implement policies to around the major issues affecting our oceans.
It’s no secret that Volvo Cars is committed to a sustainable future, with its sights firmly set on being fully electric by 2030 and a carbon neutral company by 2040. So, at each of the nine global race stopovers, Volvo Cars will set up interactive booths to display the latest cars, talk about the company’s electric future and share its sustainability journey with every race attendee.

“The Race is a great tool for building our customer relationships, strengthening the Volvo Cars brand, and presenting our company and our products to a global audience.”
The last race gathered a race village audience of 2.66 million, and the 2022 – 2023 race represents a hugely exciting opportunity to reach more and more people with the Volvo Cars sustainability message.
The all-electric XC40 Recharge and C40 Recharge will be on show in all stopover locations, sharing Volvo Car innovations to an audience who already believe in our values and share our drive for adventure.
“Volvo Cars has a long connection with The Ocean Race, and it’s right that this is continued given we both have a strong focus on sustainability,” says Stuart Templar, director of sustainability at Volvo Cars.
“We look forward to using the unique platform and reach of The Race to highlight our commitment and progress, including in helping reduce the impacts of climate change and plastic pollution on our oceans.”
If you’d like to know more about the race, you can have a look at <a href="https://www.theoceanrace.com/en/home">The Ocean Race homepage</a> or download The Ocean Race app to get to know the teams and follow their journey. It’s a brand new era for both Volvo Cars and The Ocean Race and everyone is invited

The Ocean Race 2022 – 23 will see teams of intrepid ocean explorers embark on a 32 000 nautical mile yacht race around the world, visiting nine stunning countries over six months. 

The Ocean Race 2023: Sustainability Sets Sail

Our fully electric C40 Recharge has been awarded top marks in the 2022 Euro NCAP tests, meaning that like the rest of its siblings, it’s officially one of the safest cars on the road.

The Euro NCAP is a European-based rating system to help consumers choose the safest cars possible. The rating measures car safety through a series of tests that aim to replicate real-life accident scenarios.
“We always aim to be a leader in safety,” says Malin Ekholm, head of our safety centre. “That means we adhere to the strictest safety standards in all of our cars, many of which we helped establish over time.”y
Every car we create should be even safer than the last, and our upcoming generation of pure electric cars is no different. They will come standard with state-of-the-art LiDAR sensors from Luminar to keep an eye out on the road ahead (and around, and behind) and ensure that the car can ‘see’ and react to obstacles with even greater precision.

This is on top of our already-standard automatic emergency braking, forward collision warning, pedestrian and cyclist detection systems, all of which are tested both in reality and virtually at our safety centre.
<a href="https://www.volvocars.com/intl/v/cars/recharge">Learn more on our Recharge models here</a>

Euro NCAP awards C40 with five-star rating

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

Our C40 Recharge Life Cycle Assessment report is out – how are electric car benefits affected by access to clean energy?

We aim to be a fully electric car company by 2030. And we have an ambition to be a climate neutral company by 2040. They’re motivating targets but as you read this, carbon emissions are still common across our operations.
We believe that solving a problem starts with acknowledging there is one and being transparent about it. One way we do this is by compiling and publishing a Life Cycle Assessment (LCA) report for every new fully electric model we launch. We started this transparent and proactive reporting with the XC40 Recharge, and today we launch an LCA for the C40 Recharge.
Each LCA is first and foremost a guide for our customers, so they can make an informed decision about their purchase of a new Volvo. The report illustrates through a number of scenario’s how much CO2 the car is expected to emit over its entire life cycle, including both the manufacturing and the use phase.
A crucial finding in this new LCA is that it matters a lot whether you charge your C40 Recharge with clean energy sources or not. No surprises there; we’ve been saying for years that a switch to electric cars should be accompanied by significant investments in clean energy and public charging infrastructure. The LCA, however, provides clear and hard data to support this view.

The report shows that when you charge a C40 Recharge with electricity generated from clean sources, its life cycle CO2 footprint comes down to approximately 27 tonnes of CO2, compared to 59 tonnes for an XC40 powered by an internal combustion engine (ICE).
However, if you charge it with the average energy mix available around the globe (which contains around 60 per cent energy generated from fossil fuels), its life cycle CO2 emissions can increase to as much as 50 tonnes, significantly reducing the environmental gains versus an ICE car.
In other words, people worldwide need the help of governments and the energy sector if our cars are to realise their full carbon reduction potential. As we continue to make this point and call for more investments in clean energy and public charging stations – for example at the COP26 climate summit in Glasgow – we’re also actively seeking to reduce our own carbon footprint.
For example, we aim to cut the lifecycle carbon footprint per average car by 40 per cent between 2018 and 2025; including through reducing carbon emissions in our supply chain by 25 per cent by 2025. We also aim for climate neutral manufacturing by 2025, and already now, all our plants in Europe run on 100 per cent clean electricity.
<a href="https://www.volvocars.com/images/v/-/media/Market-Assets/INTL/Applications/DotCom/PDF/C40/Volvo-C40-Recharge-LCA-report.pdf">To read the full C40 Recharge Life Cycle Assessment Report, click here.</a>

Wanted: clean energy for full climate benefits

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!

We’re soon rolling out a new over-the-air software update for our fully electric Volvos. The software package also contains a new, in-house developed in-car app: the Range Assistant. 

It's a simple three-letter abbreviation, but thanks to OTA – over-the-air – we've entered a brave new world in product development. For a long time, we could only update our cars at set times. Often we'd do it only twice a year: once in the spring and once in the fall. But thanks to connectivity and OTA, we can now continuously improve and update our cars.
Our next OTA update includes a new feature: the Range Assistant in-car app. It will come as a beta version in the latest OTA update and improvements will be made continuously.
The Range Assistant is designed for pure electric cars and helps drivers in two ways: it gives them insight into what factors affect the range and to what extent; and it gives feedback that can help optimise the range of their Volvo.
The Range Assistant was developed in-house, by a cross-functional team of UX designers, energy efficiency buffs from our Safe Vehicle Automation (SVA) team, infotainment software developers and climate experts. Because driving an electric car efficiently requires a different approach than a combustion engine car, the Range Assistant aims to help make that transition easier. That was an important starting point when designing the app.
&quot;In an electric car, speed makes a huge impact on how much range you have,&quot; says Anna Arasa Gaspar, a UX manager in our Design department. &quot;So we saw the need for an app that could give you info on what your range is right now, how much it can vary, and how much you can achieve by changing behaviour. We deliberately chose to include only those things that mostly affect range and that the user can affect. The weather is also a big factor and cold affects the battery – people can't change the weather, but the climate system can be adjusted.&quot;
For example, with the Range Assistant app drivers can choose to turn down the climate system through the range optimiser feature. Using less energy this way is a big factor in optimising range. The app also indicates to what extent the current speed and the driver's use of the throttle affects the range. Drivers can then tweak their throttle control and adjust their speed, and see the effect this has on the range.

Another exciting feature of the Range Assistant is that it was designed in-house. It's a great example of our ambition to develop 50 per cent of all software in our cars within our own quarters. That's a big difference compared to how things used to be, says Fredrik Hulth, product manager for our infotainment system within Connected Experience:
&quot;It's a big shift. Looking at the previous system, we had a Tier 1 supplier doing all the work for us. We were only specifying things and purchasing things. Our people were largely function owners, system responsibles and testers. Now we are mainly software developers. Every six or eight weeks we have a new update, and we're pushing those out to all cars we have produced. So existing customers can also benefit from those updates.&quot;
We develop features and apps much faster by doing things in-house instead of via suppliers. The Range Assistant took approximately six months to create, from idea to deployment.
&quot;It's very exciting to be able to influence, iterate and see immediate results,&quot; Fredrik says.
Testing and trying is the new name of the game, says Fredrik: &quot;One of our mottos is 'fail fast.' We can now immediately try out an idea, and if it doesn't work, we change it. There's an overall plan of course, but if things don't turn out the way we want, we can quickly change the plan. We have a lot more possibilities and freedom. Plus we can deploy new features and get immediate responses from the people using it.&quot;
Anna is equally pleased with the move towards in-house software development and OTA updates. &quot;It gives us the opportunity to evolve things and get feedback from users directly,&quot; she says, adding that it also helps meet some of the challenges around the initial roll-out of our Android-powered infotainment system.
&quot;We had this goal of where we wanted the car to be, but the Android project started from scratch and it was a bit tight when we delivered it the first time. The OTA updates enabled us to quickly provide new features that we were not able to deliver at the time of launch.&quot;
Fredrik sees another upside to the new way of working. &quot;For me, this is a much more fun workplace,&quot; he laughs. &quot;To be able to continuously evolve our products, for new and existing customers, it's very exciting.&quot;
And he’s not the only one who thinks so, he adds. &quot;We attracted a lot of new people in recent years. Before, developers were not that interested in working at Volvo. But now they are interested because they can really apply their skills here.&quot;

In-house software: new Range Assistant app for electric cars

We’ve reached an agreement with Geely to take full ownership of our Luqiao manufacturing plant in China – which means that in a few years, we’ll own all plants producing our cars.

Ever since the Luqiao, China plant was inaugurated in 2017, it's been owned by Geely, while we've been supporting on the operational side. We now have an agreement with our parent company and we'll take full ownership of the plant and its manufacturing capacity will be fully available to our Volvo Car Group.
A lot will stay the same after the agreement: the plant will continue to produce the XC40, the fully electric XC40 and the Polestar 2 models; and there'll be no changes in its operations. Changes that will happen include the transfer of all the plant's 2,600 employees, including manufacturing and supporting functions, from Geely Holding to Volvo Cars, as well as a name change.
To be in line with our naming convention for our other plants in China, the Luqiao plant will from now on be referred to as the Taizhou plant, reflecting the name of its home city instead of its home district. Apart from creating a clearer ownership structure within both our Group and Geely, this move boosts our position in China – which is our largest market.
&quot;The transfer of the Taizhou plant is a sound and logical move for both parties, as the plant is now fully dedicated to produce Volvo Car Group's cars,&quot; said Javier Varela, head of Engineering and Operations. &quot;It is symbolic that the plant that produced the first unit of our first fully electric car, the Polestar 2, will continue to help us grow in our aim to become a global leader in the premium electric car segment.&quot;
Together with Geely, we're always looking at how to improve collaboration and the operational structure within our wider group, and this agreement comes just after another similarly themed agreement during the past summer.

Oskar Falk, Plant Manager in Taizhou, said: &quot;After four successful years producing cars for Volvo, Polestar and Lynk &amp; Co, I'm looking forward to preparing the Taizhou plant for all our future programmes and challenges, now under Volvo Car Group's ownership. We are already well under way in the shift to 100 per cent electric cars, supporting Volvo Cars' long-term strategy.&quot;
In July, we agreed with Geely to acquire their stake in our joint ventures in China, which includes the manufacturing plants in Chengdu and Daqing. These transactions are expected to be formally completed in 2023.
With Taizhou now being added to our list of manufacturing plants – already consisting of Charleston, USA; Torslanda, Sweden; and Ghent, Belgium – it means that we'll own all plants producing our cars once the transfer of Chengdu and Daqing goes through.

We’re the new owners of the Luqiao plant

It's electric, leather free and turning heads – better still, the first customer-bound C40 rolls off the line today.

Our all-new C40 Recharge starts to realise its potential today as we begin to answer the order books and kick off production of our second fully electric Volvo model. This happy feat took place in our Ghent plant, one of our largest manufacturing facilities and a trailblazer in our move towards all-out electrification. Our colleagues there also produce XC40 Recharge, our first fully electric Volvo car.
And that’s not the end of it, because Ghent is busily expanding its capacity for producing fully electric cars. Within a year from now, the plant should be able to build 135,000 pure electric Volvo cars per year, representing more than half of the plant's existing production capacity.
&quot;The C40 Recharge represents our future,&quot; said Javier Varela, our head of Engineering and Operations. &quot;Our manufacturing operations and a close collaboration with our suppliers are key in achieving our future ambitions, in terms of electrification and climate neutrality. Our Ghent plant is ready for an all-electric future and will be an important part of our global industrial network for the years to come.&quot;

Our Ghent plant also had a special visitor today to celebrate the occasion: the Belgian prime minster, Alexander de Croo, attended the festivities and drove the first C40 Recharge car off the production line as a large delegation of local media representatives looked on.
&quot;Electric cars are the future,&quot; Mr. De Croo said. &quot;The production of this new model and the assembly of batteries at Volvo Car Ghent are good for the climate and demonstrate that Belgium is at the forefront of new technology. It's also good news for employment. A new model means a lot of new jobs, showing that the shift to a green and sustainable economy can bring a lot of gains.&quot;
The C40 Recharge is the latest in a series of new pure electric cars that we will launch in the coming years. By 2030, we aim to sell only fully electric cars. It’s one of the most ambitious electrification strategies in the car industry. We’re also aiming to be a climate neutral company by 2040.

C40 Recharge now on the street

We’re one of 150 organisations calling on governments to act on decarbonising international shipping by 2050 – an initiative that supports our aim to become climate neutral by 2040.

Sea transport is a key enabler for ensuring that our cars reach our customers all over the globe, and it’s also a vital part of our supply chain.
&quot;We can't become truly carbon neutral without access to zero-emission sea transports. Eliminating tailpipe emissions from our cars and manufacturing operations will go a long way, but the big challenge lies in decarbonising logistics,&quot; said Martin Corner, head of Supply Chain Management (SCM).
“As a large buyer of shipping, joining this call to action is a logical step to push the development in the right direction,&quot; Martin said.

The Call to Action for Shipping Decarbonisation will be delivered to the world's governments ahead of the climate negotiations at COP26 in Glasgow, Scotland, in November 2021.
The initiative – developed by a multi-stakeholder taskforce with members from the entire maritime ecosystem including shipping, chartering, finance, ports, and fuel production – is based on the view that full decarbonisation of international shipping is urgent and achievable.
Staffan Johannesson, Sustainability Manager at SCM, said: &quot;As one of the signatories to the call to action, we are joining forces with some of the world's largest actors in global trade. We want governments to work together with the industry to deliver the policies and investments needed to reach critical tipping points in decarbonising global supply chains.&quot;

Joining the call to action to decarbonise shipping

We’re moving away from leather interiors, in favour of other sustainable materials. In doing so, we’re right on par with ongoing trends in material design.

The C40 Recharge is an important car in terms of our electric and commercial future, as you could read <a href="https://www.volvocars.com/intl/news/articles/our-brand-new-pure-electric-C40-recharge">earlier this year</a>. But there’s another area in which our new pure electric crossover represents our future: it’s the first Volvo to be fully leather-free inside. As such, the C40 is a hallmark of our commitment that going forward, every fully electric Volvo will be free of leather.
While the raw hides supplied to Volvo Cars today are responsibly sourced as by-products from the beef industry, we want to support animal welfare by contributing to a reduced demand of leather.
Our move towards leather-free interiors is also driven by a concern about the negative environmental impacts of cattle farming, including greenhouse gas emissions and deforestation.
In addition to going leather-free, we also aim to continuously reduce the use of certain materials containing animal products inside our cars – think of certain plastics, rubbers, lubricants and adhesives, which often contain residual products from livestock.
“Finding products and materials that support animal welfare will be challenging, but that is no reason to avoid this important issue,” said Stuart Templar, one of our sustainability experts. “This is a journey worth taking. Having a truly progressive and sustainable mindset means that we need to ask ourselves difficult questions and actively try and find the answers.”
Of course we’ll continue to provide our customers with classy interiors. So instead of leather, we’re actively looking for high-quality and sustainable sources for many materials. In our new electric cars, Volvo drivers will be offered high-quality interior options based on bio-attributed and recycled materials, as well as different types of premium textiles and wool blends with responsibly sourced wool.

The thing is that the definition of premium and luxury is changing. The design world as a whole is moving towards something called Conscious Design, whereby sustainability and responsible sourcing plays an ever-increasing role in creating materials and products. Customer research also shows that for them, sustainability plays a growing role when selecting a brand’s products.
As a new <a href="https://www.media.volvocars.com/global/en-gb/media/documentfile/285907/the-rise-of-conscious-design-full-report">trend report</a> from Volvo Cars and The Future Laboratory shows, designers around the world are actively sourcing high-quality, sustainable and responsibly-sourced materials as they strive to create the luxury products of the future. That fits well with our focus on the circular economy and creating more sustainable products.
A good example is a new, Volvo-created interior material called Nordico that will make its debut in our next generation of fully electric cars. It consists of textiles made from recycled material such as PET bottles, bio-attributed material from sustainable forests in Sweden and Finland, and corks recycled from the wine industry. In other words: very sustainable and yet of the highest quality.
By 2025, we aim for 25 per cent of the material in new Volvo cars to consist of recycled and bio-based content, as part of our ambition to be a fully circular business by 2040. We also aim for all our immediate suppliers, including material suppliers, to use 100 per cent renewable energy by 2025.
So, as with everything, the development of future materials remains a work in progress. But we can rest assured that we’re at the forefront of this development and living up to our ambition of being a company that takes sustainability as seriously as safety.

The future of luxury materials is natural, sustainable and responsible

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

As we’re rapidly moving towards becoming a fully electric car company, we’re bringing both development and production of batteries closer to home. 

On our road towards full electrification, we focus on integrating every step throughout the entire battery supply chain into our own operations to make it as smart and efficient as possible. This involves the in-house design, development and production of batteries, e-motors and relevant software, and collaborating with strategic partners where it makes sense.
We have ambitious plans for our next generation of fully electric cars, and we want our future batteries to be tailored to the needs of our customers, having longer range and faster charging times.
To get going, we’ll improve the lithium-ion battery technology on our upcoming second generation of electric cars, starting with our first SUV built from the ground up as an electric-only car.
In June, we announced a planned collaboration with leading Swedish battery company Northvolt to develop and produce sustainable batteries. In the near future, we plan to work with Northvolt to increase the energy density (meaning the amount of energy a battery contains in comparison to its volume/mass) in our batteries by 50 per cent.
By the mid-2020s, we expect to introduce our third generation of electric cars, where we look to both increase range and integrate the battery pack into the floor of the car – the latter will not only save space but improve efficiency as well.
Around the same time, current charging times are expected to be cut almost in half, thanks to better battery technology and continuous improvements to software and fast-charging technology. And to round off our plans for the 2020s, we want to achieve 1,000 kilometres of real driving range later this decade.
“We want to constantly increase the customer benefits of driving a pure electric Volvo car,” said Henrik Green, chief technology officer. “By simplifying the design and integration of our battery cells, we can reduce weight and maximise space, allowing for considerable improvements in battery capacity, range and charging times.”

While we’ll increase the battery energy in our cars over the coming decade, we’ll also work to continuously reduce the carbon impact of our batteries. In our planned collaboration with Northvolt, we aim to produce battery cells using 100 per cent renewable energy, and we’re working with our other battery suppliers to do the same by 2025.
Reducing the carbon impact of batteries also includes making better use of the valuable material contained in them. Whenever we can, we want to remanufacture or reuse batteries, and we’re also investigating potential second-life applications, such as energy storage.
Where possible, batteries that have reached the end of their lifespan will be recycled at authorised recyclers that are able to offer closed loop recycling of critical materials for use in future batteries. We’ll also continue to zero in on the responsible sourcing of batteries by working more closely with our partners and suppliers, as well as through a wider use of blockchain technology.

Starting with the successor to the XC90, we’ll offer bi-directional charging, allowing customers to offload surplus electricity in their car battery to the power grid. This means electric Volvo drivers can provide energy to the grid when prices and CO2 emissions related to electricity production are at their daily peak, while charging their car when emissions fall.
“We want to offer our customers sustainable pure electric cars that make their lives easier and more enjoyable,” said Henrik Green, chief technology officer. “Through smart innovation and collaboration with key partners, we can give customers what they want – more range, faster charging and lower costs – and further boost widespread adoption of electric mobility.”
Please note: Described features might be optional and the exact customer offer may vary from one country to another, or not (yet) be available in all markets. Contact your local market representative for more detail.

Better range and charging for next-gen electric Volvos

We’re expanding our popular fully electric XC40 Recharge line-up with a new, single electric motor variant. 

Our ambition is to sell only fully electric cars by 2030, so one of our focus areas is to help more people make the switch to battery power. We want a snowball effect: the more people feel comfortable driving (and can afford) a fully electric car, the faster the market share will grow. Then there’s a boost to charging infrastructure and electric car sales. You get the gist.
To support that ambition, we’re expanding our all-electric XC40 Recharge line-up. The all-wheel drive XC40 Recharge Twin has been a big success. Now we’re adding a variant that has only one electric motor, powering the front wheels.
So what do you get in the front-wheel drive XC40 Recharge? The powertrain is responsive and powerful, delivering 231hp from a 69kWh battery. The anticipated range is around 400km on a single charge under the WLTP drive cycle (preliminary figures). The battery can charge from 10 to 80 per cent of capacity in around 32 minutes on a fast-charging system.
“With the addition of a single-motor XC40 Recharge, we broaden the appeal of our fully electric line-up,” said Henrik Green, our chief technology officer. “Customers can now choose between two distinct variants of XC40 Recharge, as well as the recently launched Volvo C40 Recharge.”

We’re expecting a big response. Especially in the EMEA region, where Recharge cars account for almost half of our sales, the new single-motor XC40 Recharge can make some waves.
“We’re committed to being leaders in the premium electric car market,” said Arek Nowinski, our head of EMEA. “In EMEA we’ve set ourselves the ambition that by 2025, two-thirds of sales should come from pure electric cars. The all new single-motor XC40 Recharge will play a crucial role towards meeting that high ambition as it allows us to enter a new segment at a competitive price point.”
As we introduce the single-motor XC40 Recharge, we also make some changes and updates to the XC40 Recharge Twin. Both variants of the XC40 Recharge have undergone a variety of changes to the software and drivetrain since the initial introduction last year, improving efficiency and range. These changes will also be rolled out to existing XC40 Recharge customers via over-the-air updates.
The new, single-motor XC40 Recharge will go on sale in the coming weeks and, will first be introduced in Netherlands, Norway, UK, Sweden and Germany.

Both XC40 Recharge variants come with a Care offer and, in selected markets, Recharge tyres. The Care offer includes items such as service, warranty, roadside assistance, as well as insurance and home charging options where available. This makes it more attractive to get an electric car and provides convenience, regardless of whether you subscribe, lease, or pay cash. Customers can check with local retailers for availability.
Recharge tyres come as standard in Northern and Central European markets. A single set of tyres removes the bi-annual hassle of tyre changes and reduces CO2 emissions compared to winter tyres – and Recharge tyres are capable of safely handling a wider range of weather and road conditions than summer or winter tyres.

More battery power to the people

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

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