Volvo Cars says it expects sales of electric cars will grow faster than the overall market in 2022 thanks to strong customer demand in spite of high uncertainty and a supply chain restricted by a component shortage.
The automotive manufacturer says it enjoyed record revenue and profitability for the full year of 2021 in spite of the constraints of the global pandemic.
The company’s revenue for 2021 amounted to SEK 282 bn, up from SEK 262.8 bn in 2020. It reported an operating income of SEK 20.3 bn for the year, up from SEK 8.5 bn in Covid-19-affected 2020. The operating margin for the period was 7.2%.
“2021 was a year to be proud of for Volvo Cars. Despite persistent component supply shortages in the auto industry, we increased market share globally and delivered all-time high revenue and profitability,” Volvo Cars chief executive Håkan Samuelsson says.
The interim report for the fourth quarter 2021 shows that revenue was SEK 80.1 billion, down 6% compared to the same period last year. Demand and order intake remained strong, but production was restrained. The negative effect of volumes was offset by strong price realisation and a shift towards high-margin models.
On the other hand, the share of income in joint ventures and associates reduced operating income, primarily driven by strategic affiliates such as Polestar, where costs were incurred in their early development phase and a change in accounting treatment related to deferred tax assets.
Operating income was SEK 3.7 billion in the quarter, representing an operating margin of 4.6%.
Excluding share of income from joint ventures and associates, EBIT margin was 7.1%.
Sales volumes in the fourth quarter fell 20% compared to the same period in 2020. The company’s electrified line-up continued to be popular with customers and Recharge models made up 34% cent of the global volume in the fourth quarter. Plug-in hybrids amounted to 28 per cent of volumes, while fully electric cars made up 6% of total sales in the fourth quarter.
The share of fully electric cars as part of total sales will continue to grow as Volvo Cars increases the annual production capacity for fully electric cars to 150,000 cars after the Northern hemisphere summer and, for the full year 2022, the company expects that share to have more than doubled compared with the full year 2021.
