Here's what you need to know
- Volvo and Mack's North American orders both shot up more than 75% in the first quarter.
- Electric vehicle deliveries and orders were also up but still a fraction of the commercial vehicle market.
- Company stresses its supply chains remain vulnerable to geopolitical conflicts and tensions and trade policy changes.
Volvo's new orders were up 14% overall and 78% in North America, the company says in it's first quarter earnings report. Net sales were down, however, off 27% in North America.
"In Q1 2026, the Volvo Group demonstrated continued resilience and operational strength, achieving solid profitability with an adjusted operating margin of 11% even as market volumes were lower than last year," says Martin Lundstedt, president and CEO. "Performance was good across all our business areas. Despite the ongoing geopolitical uncertainties, customer confidence in our products and services remained strong, reflected in good order intake and low cancellations throughout the quarter."
Global markets
Net sales globally decreased 9% in the first quarter with an adjusted operating margin of 11%. Globally, the net number of new trucks ordered was up 13.6% over the first quarter of last year to 62,755. Deliveries were down 2% to 47,504, quarter over quarter.
Net sales were up in Europe, Africa and Oceana, but decreased in all other regions, Volvo says. That includes a 27% drop in North America and a 35% decrease in Africa.
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"While the recent geopolitical turmoil and the Middle East conflict have not caused any major disruptions to our supply chain, we are keeping a watchful eye on whether they will begin to affect demand and the global economy more broadly," Lundstedt says. "With our flexible business model, strong market positions and disciplined cost control, we are well positioned to navigate potential swings in demand."
Bus deliveries globally were down 25% globally and total deliveries were down 10%. Sales were up 3% worldwide, with increases in North America and Europe. Decreases were reported in South America (down 10%) and Asia (-32%). The company says U.S. tariffs on complete tariffs and lower volumes had a negative effect.
Volvo held its annual meeting of parent company AB Volvo in April. Several board members were re-elected, including Par Boman as chairman of the board.
Q1 in the North American market
Lundstedt says the North American market experienced a number of stop weeks, but adds the production system will be in better balance given the increase in orders.
"With the new lineup of on-highway trucks in North America now complete and in production, we continued the comprehensive product renewal with the launch of an all-new version of the iconic vocational truck Mack Granite and the new Mack Keystone," he says.
Order intake in North America increased 78% for Volvo trucks and 86% for Mack trucks, when compared to the first quarter of 2025. North American sales were down 27% in the first quarter, dropping to 29,379 over Q1 '25's 40,457.
"The U.S. freight environment remained weak," Volvo's report says. "Recent spot freight increases appear to be driven by capacity normalization rather than freight demand. Construction spending is on the same level as in the previous year, which brings some stability to the demand for construction trucks. The total North American market through March was 23% lower than in the prior year."
The lower operating income in North America was caused by under absorption in the U.S. manufacturing system, increased freight costs, lower volumes and tariff costs in the U.S. These expenses were partially offset by an improved service business, lower research and development expenses and a favorable market mix, Volvo says.
Electric vehicles and alternative powertrains
Order intake for fully electric Volvo trucks decreased by 15% in the first quarter to 820 trucks. Deliveries were up 17% to 966 trucks, mainly in light-duty, Volvo says.
The company introduced a new European electric truck, the Volvo FH Aero Electric, as well as new Volvo FH, FM and FMX electric models. It is also pushing ahead with hydrogen combustion engines, beginning on-road testing, with an eye toward a commercial launch by 2030.
Also in the first quarter, Volvo, Daimler Truck and Toyota Motor Corporation announced an agreement to cooperate in a fuel cell system joint venture called cellcentric. The companies say this will "accelerate their joint objective to develop, produce and commercialize fuel cell systems for heavy-duty vehicles and other heavy-duty applications with comparable requirements."
Financial services
Volvo's financial services portfolio increased by 1% quarter over quarter and new business volume was down 1%, adjusted for currency. The company says higher credit provisions and unfavorable currency movements were the main drivers behind the decrease. Currency movements alone had a negative impact of around $8.8 million, Volvo says.
Outlook
Volvo says tariffs and trade restrictions continue to trigger uncertainty. The introduction of new tariffs, retaliatory tariffs or other trade restrictions on vehicles, parts and other products and materials could further disrupt supply chains, the company says, as could conflicts and international tensions, including in the Middle East.
"At present, our supply chain and industrial system are strained in some areas due to e.g. shortages of labor, materials and components, and transport services," Volvo says in its report. "Further strains on the supply chain may also evolve from other events, including financial distress of suppliers, introduction of new or amended export controls, tariffs or other restrictions on international trade, ongoing conflicts in the Middle East and other geopolitical events."
The company says North American retail sales are forecast to come in at 265,000 units in 2026, a number unchanged from its last outlook.
