Volvo Cars Reports 12% Sales Drop Amid EV Market Challenges

Volvo Cars, a leader in the electric vehicle (EV) sector, saw a 12% decline in global sales for May 2025, totaling 59,822 vehicles compared to the previous year, according to a Reuters report. This downturn highlights the broader struggles within the EV industry as economic and regulatory pressures mount.

Electric Vehicle Sales Take a Hit

The Swedish automaker, majority-owned by China‘s Geely, reported a significant 27% drop in fully electric car sales, which accounted for 21% of total sales volumes. Including plug-in hybrids, electrified vehicles made up 44% of sales, down 20% from last year. Volvo did not provide regional breakdowns, but the decline reflects a global slowdown in EV demand. Industry analysts point to high EV costs, limited charging infrastructure, and shifting consumer preferences as key factors.

U.S. Tariffs Add Pressure on Volvo’s Operations

Volvo Cars faces additional strain from new U.S. tariffs under President Donald Trump. The company announced plans to cut 3,000 mostly white-collar jobs, citing high costs, a slowdown in EV demand, and trade uncertainty. These tariffs, aimed at protecting domestic industries, could increase Volvo’s production costs, which may translate to higher prices, potentially impacting adoption rates in the market.

Industry Trends and Future Outlook

Volvo’s push toward electrification, including its goal “for 90 to 100 per cent of its global sales volume by 2030” to be electric vehicles, may face delays if demand continues to waver. For enthusiasts, this underscores the need for more affordable models and robust charging networks, especially in the U.S., where public chargers number fewer than 180,000. Despite the sales dip, Volvo’s shares rose 0.5% at 0710 GMT, signaling some investor confidence in its long-term strategy.

Photo courtesy of Volvo.