Volvo Cars Q1 Operating Profit Slightly Down, Will not Follow Tesla's Price Cuts

Swedish-based automaker Volvo Cars reiterated its outlook on April 27 and said it did not see the need to cut vehicle prices given healthy market demand, according to a foreign media report. In the first quarter, Volvo Cars' revenue exceeded expectations.
Currently, automobile manufacturers such as Volvo Cars have begun to get rid of the long-standing shortage of supply chains. In the past few years, the shortage of supply has had a serious impact on car production and pushed up production costs.
Volvo Cars said that its current production situation has improved, but it still faces some shortages that will continue to affect production in the second quarter. Its goal is to be purely electrified by 2030.
During the same period, Tesla launched a price war at the end of last year to stimulate demand and fend off increasing competition and has been cutting prices for some time since, and as a result, the company posted its lowest quarterly gross margin in almost two years in the first quarter, a move that has affected the share price of the entire industry, including Tesla itself.
Volvo Cars said in February that it had no plans to cut the prices of its electric cars, and on 27 April, Volvo CEO Jim Rowan told the press that the company had no reason to cut prices as long as demand continued to remain high. The company stressed that consumer demand for its models was stronger, with sales in the first quarter up 10% year-on-year.
Rowan also said that the price of lithium, a major source of cost for electric vehicles, had started to fall. This is despite the fact that Chile, the world's second-largest producer of lithium metal, has said it will nationalise its lithium industry. He added that more lithium resources are also available from other parts of the world, so he believes the cost of electric vehicles will fall further.