Volvo Group (VOLVb.ST): Thoughts After the Volvo Autonomous Driving Event and Latest Industry Developments
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Abstract
Following a site visit to Volvo Autonomous Solutions' Fort Worth, Texas facility, Goldman Sachs reiterates Buy on Volvo Group (VOLVb.ST) with a SEK 407 twelve-month target (20.3% upside from SEK 338.30) and keeps it as its top truck OEM pick. Volvo plans the first driverless commercial trucking launch by an OEM in the US in 1Q27, over 300 trucks operating in the Sunbelt by 4Q27, industrialization from 2028 and roughly $3 billion of autonomous revenue by 2031, accretive to group operating margin. Under the TaaS model at $2 per mile over a one-million-mile life, lifetime revenue per truck approaches $2 million, more than five times a one-time vehicle sale. Goldman views the $3 billion target as conservative, at only ~6%/10% of its estimated global/US autonomous truck market sales, given Volvo's ~19% 2026 global truck share (25% targeted by 2030). Goldman models the AV truck market at $29 billion US and $52 billion global by 2031, and $105 billion and $560 billion by 2035, with AV cost per mile falling from ~$2.43 (2028) to ~$2.03 (2035) versus human-driven costs rising from ~$2.55 to ~$2.84, expanding the global AV gross profit pool to ~$135 billion. Key risks: weaker macro, further construction-equipment tariffs, FX, insufficient German stimulus and Chinese competition.
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