Volvo sees North America weakness lasting in 2026 on tariffs

Volvo AB shares fell the most in six months after the truckmaker warned that a demand slowdown sparked by uncertainties over tariffs will extend into next year.

The manufacturer on Friday projected declining North American truck registrations for 2026, with Chief Executive Officer Martin Lundstedt citing rising uncertainty tied to President Donald Trump’s planned duties. Volvo also posted weaker orders and lower earnings in the third quarter.

The stock fell as much as 7.2% in Stockholm, the steepest intraday drop since April. It’s down around 2% this year.

Orders remain under pressure from weak freight activity, tariff risks and regulatory uncertainty pending emissions standards. French tire maker Michelin earlier this week lowered its financial guidance for the year following a bigger-than-expected sales slump in North America.

Volvo and its peers Daimler Truck Holding AG and Volkswagen AG’s Traton are bracing for Trump’s planned 25% tariffs on imported medium- and heavy-duty trucks, which are due to take effect next month.

While Volvo, which also owns the Mack brand, builds several models domestically, it still faces higher costs for imported components used in US production. The group operates 16 manufacturing and remanufacturing facilities in the US, Canada and Mexico, according to its website.

“We are in a period with weaker demand in our key regions,” Lundstedt said in a statement. “In this situation, we focus on what we can impact.”

Volvo’s adjusted operating income for the third quarter dropped to 11.7 billion kronor ($1.24 billion). Net truck order intake fell 14% due to declines in Europe, South America and Asia.

Volvo is cutting costs and adjusting production to deal with muted demand, while maintaining investments in innovation and electrification, the CEO said during a call with analysts.