Thank you. Good morning and welcome to this quarterly report.

We start, this was of course a very negative result of quarter three. I think the conclusion is the business environment have turned worse than we anticipated.

I think that is really a conclusion you can draw now. Compare with what we saw 12 or maybe six months ago, it has gone faster and has affected us more.

In China, the market is rapidly declining, and especially for the Western premium manufacturers. Our revenues are more or less down with 50%, and that's of course the major reason for our result in the quarter.

United States is also of course very challenging. We were strong in electrified cars, and then the incentive systems was discontinued, and that has of course influenced our possibilities to sell our plug-in hybrids.

The profitability was also impacted by the tariffs. That's of course especially serious for us which import basically all our cars and have a very limited production locally.

Here is also not to expect any tailwind in the near term, very low consumer sentiment. Europe is now where we still contribute to profitability.

It's a relative stable market. We also see something very positive is that the electrification is now really speeding up, and we are in the lead here in the premium segment, and we already have a BEV share of 45% in the quarter, and that is class-leading.

That's very positive for us. We of course also will bring out more electric cars on the market, and we see also a strong order intake for our BEV cars in Europe.

Europe is now holding the business up for us. In this critical situation, what should you do?

I think the only thing we can do is to do things which you can control and influence. That means we need to look at the cost side again.

We will be reinforcing our turnaround plan, which we are successfully implementing, and we need additional cost actions of over 5 billion SEK on the direct and indirect cost side. This will also mean a 2,500 reduction of number of jobs.

This we will do in the overhead side. We have two things really driving this.

One is the empowering of our regions, which means that we of course need to do in the same time a reduction and have a leaner corporate structure here in Sweden. Of course also on the R&D side, we are now through very intense development projects with development of the SPA3 platform, the huge core central compute, that we will not do in the future, so that means also we need to reduce to come down to affordable levels here on the corporate overhead.

On the variable cost, I think there is further possibilities to bring down the BOM cost of our car by utilizing Geely synergies. We can use more common hardware components in our car with our Chinese colleagues.

That will also help us. It's part of the program, the 5 billion.

We also need to concentrate our production. We have had seven plants globally.

I think that's too much for us, we really need five plants: two in Europe, one in US, two in China, which will be 100% Volvo-dedicated. Then we have the plant in Ghent and Chengdu where we are looking into solutions where we could use those plants together with Geely and other brands.

This means a reduction of 2,500 people, as I said. We will take out temporary jobs, as what we call consultants.

We really need to use natural attrition and not backfill those positions as we might normally do. Really be creative, look into job rotations, and really get reduction from the natural attrition.

We will also have directed exit packages to some people. We believe we can reach this 2,500 around mid next year.

We can today also not exclude that we might need to take additional actions here in February if this does not work according to the plan we are now saying. I'm relatively hopeful that it should work with these measures I just said.

Of course we will also have to adapt our blue-collar workforce to the current volumes, and that's of course maybe basically more in China than in Europe, but of course we always do that. All of this, the package is to lower our break-even volumes and to improve cash flows.

In this situation, I think it's also important to believe there will be no short-term tailwind from the market. We don't believe that, the improvement of the company in the mid-term, near-term has to come from this cost package and improvements internally.

Of course the company will never be successful long-term only with cost cutting, we need also a future-oriented strategy, which is really how we will make the company successful long-term. That was something that we presented some months ago, and I think we now all see that it's really good that we have this now, what we not only have to talk about cost cutting.

Now it is to wait for this strategy really to take effect and give contribution to better performance. The strategy is really a regional strategy.

We need to have regional products. Global products won't work in China anymore, and we need to localize more products to US, and we need absolutely a complete all-electric product offering for Europe.

One-size-fit-all will not work in the future. We need much more regional approach.

The second part of the strategy is mainly grow through electrification. Electrification will help us grow, and that is of course obvious when you see already today we are leaders: 45% of the cars are all-electric already today in Europe, and the total market is now really going electric, going in our way, I would say.

We will also have now our second-generation PHEVs that will start this year, and then we will also have a long-range plug-in hybrid fulfilling all requirements on the market that will help us. We will localize to Charleston the very first car already in the beginning of next year.

In China, we will have two new two China-tailored cars, that will say absolutely fully competitive cars for China, including Chinese software, Chinese ADAS solutions, and of course a cost level that is also fully competitive on the market. Then in Europe and globally, we will also have the next BEV on the SPA3 platform, with of course helping us to lower our product cost, and the first deliveries will happen here after summer next year.

Keep our strategy on track in parallel is very important as we do the short-term cost cutting. Next chart I see is for you, Erik.

It is. Thank you.

Thank you.

Hello everyone, and let me talk through a little bit on what we're doing then also on the commercial side. As Håkan talked about, it is a very difficult market out there.

If I start in China, total market is down around 20%, premium Western market is down more than that, and so are we. The focus for us in China now is to stabilize and rebuild the competitiveness at the level we are right now.

That means reducing inventory, commercial costs, and adapting to a lower demand. It's also, we're working very actively in China now to improve profitability for our retailers because they're also suffering as we are doing, and also trying to find that balance at a lower volume.

It's important in China right now to protect your margins and not get drawn into too aggressive price wars. The strategy in China, as Håkan talked about, is to localize with a local product offer, and we have one product which is the XC70 which is already built on that strategy, and we're seeing market-share-wise that is performing very well in its segment, plug-in hybrid for premiums, and we are now seeing how we can expand that product into specific cities, especially with the new variant which is the front-wheel-drive variant, which is important to address a bigger part of the market in the lower price segment.

Also adding two new cars as a first part now of the strategy to come, and this will be hugely important on how we win in China over time. Right now China is about stabilization, it's about improving the retailer network and preparing for the new cars coming where we are capitalizing on our strategy.

Now US, we saw positive trends in US in Q2 in terms of volume. US has proven to be a difficult market to find profitability on.

The consumer sentiment in US right now is at a 50-year low, which impacts of course the car business as well. On top of that, you have tariffs.

On top of that, you also have changes in regulations on electrification. We are seeing now that we will need to focus our strategy in US around profitability rather than volume and growth.

We're targeting now specific regions with the updated portfolio, which is very important for US, of our plug-in hybrids and our XC90 and XC60 mild hybrids. New technology, new face on the XC60, which will be very important.

We're also changing the way we are steering US, segmenting it into four very independent and mandated regions, closer to the local markets, and running a focused strategy within those regions. For example, a boost plan around California, which is a part of US which is actually quite highly electrified and fits very well to our electrification strategy.

Optimizing our sales channels, of course part of protecting our margins, that's very important. We are hit by tariffs, we need to be very selective where we compete and compete only where we have a healthy underlying business.

Then we're localizing early next year the EX60, which will be very important because that is the big seller in US right now, and then we're getting inside the tariff barrier of US. Now, as we talked about before, Europe is right now holding the fort when it comes to profitability of the company.

Europe is doing what we want Europe to do, if you put it that way. It's electrifying, and for us, it's very much now in Europe, how do we capitalize on that electrification momentum.

It's not only about BEVs, we're also adding long-range plug-in hybrids with emissions well below 50 grams, which is very important in certain markets with certain taxation rules where electrifications are slower. We're expanding our BEV lineup early next year or deliveries after summer with a new car based on SPA3.

We're then also, of course, building on the EX60. Let me talk a bit about the EX60.

Now the EX60 is a great success in the market. We have now, and we're not even selling it in all markets in Europe yet, but in the markets we're selling it, we have achieved over 50,000 orders.

It is a fantastic car, which is appreciated by our customers and our retailers already now. It's also a car with a lot of innovations.

In today's industry, our way to compete is to have the better product. Those innovations are to some extent difficult for us to start the production as we want.

If I take the example of the battery in the car, it's a unique battery concept, gives the car unique capabilities in terms of weight, cost, drivability, silence in the cabin. That process is slightly more difficult for us to start the production ramp-up.

We now roughly have around 5,000 cars which are either at the retailers or customers or on their way to our customers. We're seeing improvements every week in the battery plant, and we are learning how to produce these great cars.

Most importantly, we're seeing great reception of those cars at the retailers and our customers. We're very confident about the product.

It takes longer time for us to ramp it up because it has innovations which makes the car great. That is something we're working very focused on right now: How do we get this car out at pace to our customers?

With that, Fredrik, I'll hand over to you.

Thanks, Erik. Let's go into our financials.

Q3, I think it's easy to see that this was a very challenging quarter both operationally, but also from external events. It's also important to note that when we compare it to last Q3, that was also a record high.

Retail sales were down 11%. Wholesales was actually down even more, and that's largely due to China and us trying to help dealers manage inventory, not pushing wholesales.

Revenue further down 23%. We end up with a core result, if you will, at -3.7 billion.

The full group result, if we include JVs and associates and income items affecting comparability, was at a full 5.6 billion loss. There's really two big drags on a group level.

Firstly, it's a 900 million accounting effect from our share of Polestar's Q2 losses that we take in. Secondly, it's a 1.1 billion write-down linked to CAFE emission credits.

Here, CAFE credits in the US is something where the regulation has recently changed, and there was a regulation change enacted late September. This includes a retroactive change, basically reducing CO2 emission requirements all the way back to model year '22, which reduces the need for credits for all OEMs.

We have already contracted to sell our surplus credits. We have very sustainable cars.

Given the lower need with our counterparties, we cannot fully defend the value of this. That hits us in the accounting result.

Cash flow is also negative, in part due to seasonality. Production is closed four weeks over summer, and we had very high production before summer which we're now have paid off.

Of course the underlying result is contributing to the cash flow. Going into some of the details and starting with revenue.

As you can see, volumes is of course severely taking down revenue with 10.7 billion. Sales mix and pricing, a further 3.5 billion.

Then we have a very large other category. This is a year-on-year walk, to keep in mind there is that last year we had large positives, we had high used car sales, we had a big one-off sale in terms of licenses.

This year we instead have negatives, here especially the CAFE write-down impacts revenue. Net it becomes a big year-on-year swing.

If we then turn to EBIT development and focus excluding JVs and items affecting comparability, we had a very strong and tough comparison quarter last year with 5.8 billion in EBIT. That was also elevated by positive one-offs last year.

This year it is the opposite, it's negative with a loss of 3.7 billion. Volumes of course had a negative impact, 1.9 billion, reflecting especially lower sales in China, which had a drastic decrease.

Sales mix and pricing is hitting us 2.5 billion, primarily driven by less favorable mix and a continued price pressure, especially in China, but also US. Variable cost, negative, which is a new, and this is due to the known raw material increases that are now coming in.

We're seeing raw material cost increases more than offsetting the cost reductions we are achieving. Indirect spend is still contributing positively.

Last year we were well on the way with our cost program, and we see that we have further progressed here with an 1.9 billion contribution, but it's not enough to offset the headwinds. We have lower capitalization, we have higher D&A, combined impact of 1.1 billion.

Then FX is hitting us negatively, 1.2 billion, driven largely by a stronger CNY. Finally, we have a very big other category of 4 billion.

This is again a big swing from a year-on-year perspective. Last year this was very positive, including large license fee profits, and this year instead negative, in part driven by accounting effects on our lithium hedges, where lithium has moved quite a lot, which is hitting down on the number.

All in all, -3.7 billion or 5.6%. Maybe putting this a bit in perspective, if we compare to the second quarter, we are really seeing a sort of sequential deterioration in volumes and margins in China.

We see the raw material cost increases, and then this adverse effect on FX. It puts a lot of pressure on our profitability.

Despite the cost reductions we're doing, we are very far from where we want to be profit-wise, of course. Turning to cash flow and liquidity.

We had a weak cash flow performance. Worth noting, though, is underlying operations is still cash-contributing, despite quite heavy accounting EBIT losses, EBITDA is positive.

Investments come in at a relatively low level of 5 billion. Then we have other items, tax payments, etc., of -4, and a net working capital of -1, largely flat.

We are reducing inventories, but we're also paying off a big production we had just before summer. In total, free cash flow of -8.9.

Despite that, liquidity is very, very solid: 32 billion in cash and 55 billion total liquidity. We need to improve.

I think to improve cash flow, we are working to both improve margins and lower the break-even point. As Håkan mentioned, a part of this is reinforcing our ongoing turnaround plan with an additional 5 billion.

We really do this by both finding structural efficiencies and further automations in reducing SG&A, by lowering R&D spend. We have now set the technology base for the future in the Western world with SPA3 and HuginCore.

That means we can take down investment levels. In China, it's really about weathering the storm.

We see that the global products need to become regional, that is our strategy, and we have the right direction, and the leverage of Geely in that. Awaiting those products, we need to really focus on cost efficiency.

The good news is, mid next year, two of the six products announced will come. We're also working harder to get more commonalities on individual parts together with Geely.

These actions we talk about, they will be implemented before summer. That is the ambition.

It means reducing 2,500 jobs, and that means at suppliers and at Volvo Cars. This is both bought services, consultants, and for the Volvo employees, we expect to do this from natural attrition and voluntary exits.

The financial benefit of the 5 billion, we measure on the full year, and we will incur a restructuring cost of about 600 million that will be recognized in Q4 due to this. If we then look ahead, we see that these external challenges are likely to continue, as Håkan said.

The short-term volumes will be severely challenged. The very tough market environment remains, and we see a China where we continue to see weakness or even further deterioration.

We've talked about the EX60, hugely in-demand car, very profitable car. The financial contribution of that will of course be delayed, as we are not ramping up according to fully the plan we had before.

US recovery is also coming in slower than expected. For cash flow, and in the very near term, that means we will have support from normal seasonality if you look at the fourth quarter, but it's also of course impacted by the volume challenge we see.

Restructuring costs are coming in the financials, and we have quite low visibility. I think the good thing is, if there is a good thing, that the headwinds we're seeing now from tariffs, from regionalized products providing tough competition, those are exactly the points we are addressing with the strategy we've set.

As Erik and Håkan alluded to, we have some of the stepping stones on this strategy coming online mid next year, which should provide contribution into the second half. With that, Håkan, do you want to summarize?

Yes, to conclude, the business environment is turned much tougher than expected and planned, I think that has to be one conclusion. Then of course, what do you do in a situation like that?

You need to do what you can influence. You cannot complain about the external environment, doesn't help us.

Also very important because hoping for a really short-term improvement from outside, I think is also not realistic. Short-term performance improvement must come from our turnaround plan, which we can steer.

That is we need to lower our break-even volumes, and we need to secure a positive cash flow as fast as possible. That is really what's the purpose of this action package.

I think it's also very important to remember that will not make our company successful. Now we really need a long-term answer, how will we meet the challenges our industry is now facing.

Deglobalization, the climate change, and the hypercompetition from the Chinese, what is our answer? I think we are very good now to have a very clear and solid answer to those challenges.

We will have a regional structure, and we will grow with electrification. We will of course utilize synergies to bring down our cost.

Stay on course with that strategy is also very important to do now. I think I'm very glad to see that we are delivering on that also in the short term: first two regionalized car already next year, and next car on the SPA3 platform also next year.

All of this of course should be very dangerous to do if we could not do it at the same time as we keep investments on an affordable level. These new cars will not jeopardize our cash flow.

They will be done in a smart way, utilizing synergies, utilizing investments already done. We will also secure here where we are down now on an capex investment level that is affordable, and that is around 30% down compared to 2024 when I think it was very high in the midst of this investment phase.

To conclude, we are working hard to get performance from our turnaround program, and we are securing a long-term success with the company with our strategy. With that, I think we are ready to go into questions and answers, and that's Ron, you will lead us.

It's basically we will not be successful in China, I think nobody will be successful with the old recipe where you had global cars developed in Europe and sold them to a premium price. That is gone.

Those times are gone. Now you need to regionalize, you need to have a low-cost hardware platform number one, and that we have of course utilizing common platform with Geely, but then you also need totally adapted localized software, including ADAS tools, which is coming very fast.

That we are doing. If you would not do that, I think it would not be possible to stay in China.

Anybody will have huge problem, but we have a solid strategy to maintain a strong global brand by being really regional in China. That will happen.

It will be tough couple of years, but then we will have a totally regionalized approach with an empowered region and fully competitive cars.

No, I think there of course is easy part is the temporary consultants, so that is a big part, but it will also influence our own employees, and especially on corporate overhead side. We need to be leaner on the corporate central side when we empower regions.

R&D of course very natural after this huge investments, of course we need to come to more normal level, and that we're doing. Natural attrition is another possibility, and really not backfilling immediately with rehiring.

We have a hiring freeze to really trigger internal solutions, and then also last tool we have are targeted voluntary packages for some people to leave. We see now that that should bring us this reduction 2,500 till mid-year.

I think it's too early to also exclude that we maybe need to take other actions here in the beginning of next year if this does not work as we now see it. I really hope we can avoid that, but we need to reach 2,500 in reduction.

No, but as I said, it is of course a concept, especially around the battery, which takes more time for us to learn how to produce or not. We know that the cars, when they are reaching the market, are very well appreciated by the dealers and the retailers.

I will not comment on an exact number, but I can say that we have now produced around 5,000 cars. We are constantly increasing production week by week in the batteries, and we're getting better of fixing the problems we find faster in the battery plant.

I expect it to have an impact in the short term, but over time, over the course of next year, we will get to the invested production pace.

Hi. Thanks for taking my question.

Hope I'm audible. My first one is just on the profitability and the restructuring that you're putting through.

It's 5 billion by year-end '27 sort of run rate. That will probably, if I look at what the Q3 was, 4 billion of losses, it will put you just above break-even that sort of restructuring.

There's more pain to come in terms of raw material costs. What happens in between?

What you can do to improve the profitability from the current levels in Q4 and in 2027? That's my first question.

The second one is on the liquidity side. The net cash is at just 1 billion SEK.

What sort of minimum liquidity do you require, and how are you going to bridge that gap? Thank you.

Yes. I think in the near term, as stated, we see a very heavy volume challenge, right, and we are, as Erik is saying, improving the EX60 ramp-up.

Previously we've communicated strong financial contributions coming from Q4. In Q4 we're seeing that that is delayed.

Of course, as we ramp up, EX60 will support more and more. Then towards next year, we have low visibility.

We know that some of the stepping stones on our very clear strategy will happen in terms of localization in the US, in terms of two new cars in China, and that will of course support. It is a tough market, and we are, with the actions we're taking today, aiming to reduce the break-even point and not bet on the market returning.

I think on cash, we have 32 billion in cash on our accounts, 55 billion total liquidity, and that is well above the liquidity ratios we need, so.

Mm.

It means really what I tried to explain. You need to have a regional developed product program to be successful with Chinese software.

Until we have that out on the market, the first two will come out, but of the 13 cars we said we will launch, six of them are Chinese cars to really have this full program regional. That is in the pipeline.

Before you have that, I really don't see any realistic possibility to improve in China. That is you need to work on the cost side and bring down and see what you can do.

Can you do more together with Geely, and so on? Then the long-term success will come from our strategy.

Which I think is really important, because if you don't have this strong, credible strategy, I think you would have a very weak future perspective in China. I think it's relatively in the business, I think we have one of the absolutely best answers to the challenges everybody is seeing now in China.

You could, of course, I think it would be not correct to blame external factors only. Of course you could said we should maybe have realized earlier that we need to be more regional in China.

Maybe it should also have realized earlier that tariffs might come, we need to localize more in the US. That's a weakness right now which we are addressing.

Of course, I think it's of course our decisions that is why we are where we are. The big external thing, I think everybody underestimated the impact from the Chinese car industry expanding very rapidly, taking over the Chinese market, and of course now ready to expand further into the world.

That is new.

Thank you, Ron. Very good morning to all.

Thanks for your marks, Jose from J.P. Morgan.

Håkan, just a couple of questions. Obviously, you came back into the group from my perspective to stabilize earnings momentum and the balance sheet, which I have a lot of respect for that, and shows the strong track record you have.

Having said this, you're facing obviously more difficulties in the market. What I'm trying to understand, as you think about 2027 before you hand over the company to the next CEO and obviously the great reinforcements you're bringing on the board as well, from here, how much do you think you need to take fixed cost down?

End of '26, what is the fixed cost reduction big picture you're thinking about on fixed costs, on unit sales, and on capex, '27 versus '26, to stabilize the cash flow momentum? Then second, on the EX60, I don't want to dwell into what is to change and so on, but and I take the point of very, I think, honest assessment that you are learning to produce the vehicle.

We could potentially argue that this should have been done before, right? The changes in technology you've done there, megacasting, software, etc., etc., have complicated, probably, the final assembly of the car.

What are a little bit the lessons learned for future car generations, because we've seen this with EX90, we're seeing it with EX60, and at some point, this learning curve will come through for the rest of the cars, and we will have a more stable production schedules for the company. Thank you.

No, I think you need to of course realize if you want to have class-leading new technology, it means a higher risk to implement than continuing with the more conventional technology. In this new car, megacasting has caused us no headaches.

It's really the assembly of batteries directly into the underbody of the car, which is a highly automated process, but it is not really new technology, but it's of course putting in how many cells do we have, close to 100, that cannot be done manually. It has to be done in an automated line.

It is a highly complex mechanical assembly line, which I'm quite confident we will of course master. It's not anything new, but it is a new assembly line which does not exist anywhere else in the world.

We will master that. We were maybe too optimistic in the ramp-up, but we are improving, as Erik said.

That the learning is, I would still say, not to avoid really breakthrough technology. We need to do that, but it's a higher risk.

You can take the central compute. We have had a lot of problems with introducing a central compute, but I think we are very glad now that we have that, because now we are future-ready to really make a software-defined car.

It would be more challenging if you would have the intelligence spread in 150 boxes bought from suppliers. Now we have the means to really control software development, which is a absolutely fundamental step, which is not easy, but we did it, and I'm still convinced also the battery.

Long answer to a good question, you cannot avoid new technology. You can always of course learn and master it and do it better next time, and that I think is the learning.

Once you have introduced central compute, when you introduce cell-to-body, then that will work in future cars as well. When it comes to cost level, or maybe, Erik, you want to—

No, if I just can chime in, and you're absolutely right, because your question was also about learning from SPA2, EX90, and EX60, and for me, it's two very different problems. As you're saying, Håkan, the EX90 was the first step into the software-defined car.

We learned a lot about that, and that also impacted the car once it was built. EX60 problem is a mechanical production problem.

The cars out in the market are received in a great way, and have very good quality, we're seeing a very stable product once it's built, but it's taking a little bit longer time to build it.

It's good. The cost levels, I think, Fredrik, you are better.

I think on cost, we're launching this 5 billion program, and of course a big part of that is indirect spend, which ties to fixed cost. Not going into a detailed breakdown of it, but on a highest level, you can say in the end of '27, we're targeting a level which is roughly 25% lower than what we had in 2024.

It's quite massive steps we've taken already and continue to take as we become more efficient.

Capex, we already said that's down 30% compared with '24.

Yes.

Big reductions on both cost and capex.

On both.

Thank you.

Good morning. Thank you for taking my questions.

The first one is on Europe. It's clearly the one region which is stabilizing and supporting your business.

China and Chinese OEMs are not only active in China, but more and more in Europe. What are you seeing here, and should we see any threat to your, yeah, solid European development in 2027 going forward?

My second question, you mentioned you want to lower the break-even point on volumes in your production network. Any figures or any glimpse you can give us here?

What is this now or what you're targeting, even percentages and shares in absolute figures would be super helpful. Thank you.

Maybe, Fredrik, you could take the first a bit first, maybe you can fill in, Erik, but the Chinese, they are of course severe competitors in Europe, and they do do good cars. I think it's also important that we get level-field competition in Europe looking forward.

I think Chinese players are accepting already that they need to come to Europe and invest in Europe in production, in supply chain, also in product development. That's I think is no surprise for the Chinese.

They required exactly the same for us. I think the car industry does not need protection in Europe.

We have a very strong car industry, but we need a level-field competition with the Chinese. That will now come with measures from Brussels, I think we are absolutely capable to meeting competition from the Chinese when it's on a level field.

We have a few proof points on that also. We're seeing in markets where we're not having tariff protection, like UK and Norway, for example, we are managing to compete very well with the portfolio that we have.

Also, if you take the EX60 as a product, now we are well, well above our commercial targets for that car, and we're selling that car at a more profitable level than the equivalent PHEV in a market which is already today highly influenced by Chinese. There's only, in my learning, it's only one way to compete, and that is to have a better product and a better customer offer.

That's also what we're working a lot on: How do we strengthen our whole customer offer? That's not only about the hardware, it's also about the other attributes.

There, I think we have a unique opportunity versus the Chinese.

Yes.

I think it's actually hard to talk about volumes given the market we're in, because as we see, we have very high tariffs in the US, which is of course weighing down the profitability on those cars. Talking about a company volume number actually doesn't make much sense.

I'm not going to give much flavor to it, beyond saying we are reducing fixed cost, and of course that means we need to have less sales to make a profit.

Might be an influence, but this company have never developed and produced all our mechanical components in the car. We have had suppliers, it's really nothing new.

If we see that we together with Geely have higher volumes and lower cost on mechanical components, why shouldn't we share that? I think there's still more potential, which we will really tap now.

It's not just purchasing together, it's also using the same part. Chinese supplier is going to come to Europe, but there is also a lot of parts that you can bring in very competitive from China in short term.

We are looking into both of that, but it will not in any way change the fundamentals that Volvo cars based on SPA3 platforms are developed and built here in Torslanda, Sweden.

Now of the 13 cars, I think six of them is to really have the right cars for China. One we already have, the XC70, and then there will be two coming out here.

What is different is then of course they are locally produced, they are locally developed by utilizing common platform with a very competitive hardware cost level, and maybe most importantly, really deciding now have a really Chinese software package. In-car infotainment, voice control, absolute fully competitive, and also ADAS systems, pilot assist or pilot automated systems, which is coming very rapidly in China, that we will have as well, which would be more or less impossible with Swedish-developed software.

Yes, thank you for taking my questions. I guess the first one just a short-term, sort of financial question.

Obviously, noting the wholesales are lagging retail quite substantially, should we expect that trend to continue into the fourth quarter as you destock further? I guess some high-level color on whether this can be a margin trough now for the group in the full year would be helpful, given the extent of the losses.

Second question on China. I know you don't report profits regionally, but it's interesting, some of your premium peers in China claim their China businesses at break-even, and with the variable costs in China and operating leverage in China, they can keep it at break-even levels.

Could you maybe give some color on how big a driver of the losses we see this quarter is China-related? It'd just be really interesting to understand if this is mainly a China story in terms of the losses this quarter.

Then a final question just on the EX60 battery challenges. Have you provisioned any extra warranty costs for that or do you plan to take extra warranty for those issues?

Thank you.

The last one, I think, is easy. It's not related to car quality and so on.

It's just the pace. It's really the uptime of the automated assembly system.

There is no influence on warranty cost.

No.

I think on wholesale lagging retail, we would expect it to be slightly more balanced, but I guess there is still a China uncertainty. As Erik alluded to, we're also trying to protect the dealer profitability as we're weathering the storm, so that may play in, and exactly how that plays out in Q4, let us see.

In terms of China profit, we don't disclose the exact profit, but what we are saying is that China is not really contributing to, if you will, the fixed cost of the company. We are seeing a very challenging contribution from it.

From a year-on-year perspective, that is of course worse than last year. Looking at the revenue numbers, I guess you can infer, we're 50% down in revenues.

That is quite substantial, right?

Yes. We make very sustainable cars, that is good, which means that we produce a surplus of CAFE credits.

In 2024, we had contracted to sell those, and by doing so, we did a revenue recognition of that. What's happened since then is basically that there has been a series of changes in the regulation, not impacting our contracts, except for a change that was done now, basically late September, where US is now retroactively changing the fleet emission requirements all the way back from model year '22.

That basically means that NHTSA's assessment is that most OEMs will now not have a credit deficit, i.e., no need to buy credit. Then, if we are prudent and look at the values we have on the balance sheet, we then need to do a write-down, which amounts to 1.1 billion.

Yeah. Yes, thank you.

I have a follow-up, and this is about the EX60 localization in the US. I think the initial indication was that it would happen in Q4 '26.

Now it looks like it's been pushed into 2027. What's driving that?

Given the tariffs, I would have expected that would like to advance this, but this has now got again pushed further ahead. What's the reason?

Now when you measure it in quarters, it sounds more dramatic than it is, I would say. I remember we plan to do it before Christmas, somewhere beginning December, now it's after New Year, sometime in January.

Not a big thing, and there is no major reason for that that I know of. It's normal fine-tuning in the work being done there.

We're doing it as fast as possible, of course. Our big deficit in US, that we have too low local production, this is a good start.

Then the really big move will be later during this decade when we bring in a really all-new car, absolutely attractive for the US market, including also variable options, powertrains. Because US is electrifying slower than the rest of the world, we need to have a new car that is also flexible in that respect with all-electric or plug-in or hybrid.

We don't guide on cash flow, but as I stated, seasonally, Q4 is stronger. We build a lot of inventory over the year, and that is reduced in the fourth quarter.

That said, we see very large challenges on volumes, and we're shifting production accordingly, which will also impact cash flows. In terms of liquidity, we're very well above our liquidity thresholds, so, and 55 billion in liquidity, so.

No, that can only come through a very solid strategy, addressing really the challenges everybody is seeing. Globalization will not come back as we see it.

We need a regional approach, need regional products. Electrification is coming fast, and then we need to grow with electrification.

We need to face hypercompetition from the Chinese car industry, where we have unique possibilities with our connection with Geely. Our strategy are addressing this, I think, in a very credible way.

The value of that strategy, if you sum it up, is around 8%. Now we are starting from a lower level, and we have to fix that with the short-term actions.

The short answer is the success of this company will be brought not short-term with cost cutting, it will be short mid-term with the strategy.

Thank you.