===== SIDA 1 ===== Freedom to move. Volvo Car Group Annual and Sustainability Report 2025 ===== SIDA 2 ===== OUR PURPOSE / WHY WE ARE HERE Personal With our deep understanding of human behavior we develop products that understand, support and protect people in and around the car. Never forcing anyone to compromise on the way they want to live life. Sustainable We always aim for the highest standards of sustainability in mobility. This approach does not mean compromise – it means creating smarter, more efficient products that people can be proud to choose. Safe In 1927, our founders stated that safety is the guiding principle behind everything we do. We stay committed to leadership in safety and a higher quality of life for people. To provide freedom to move in a personal, sustainable and safe way. VOLVO CAR GROUP  / OVERVIEW / PURPOSE2 ===== SIDA 3 ===== OVERVIEW 2 Purpose 4 About Volvo Cars 7 2025 highlights 13 CEO letter 15 MARKET 16 Global automotive market 17 Market defining trends 18 OUR STRATEGIC FRAMEWORK 20 Our guiding principles 21 Our strategic direction 22 Customer experience 24 Committed organisation 26 Electrification and regionalisation 29 DIRECTORS' REPORT 36 RISK 37 Enterprise Risk Management 42 CORPORATE GOVERNANCE 43 Corporate Governance Report 51 Board of Directors 56 Executive Management Team 59 Extended Executive Management Team 60 Auditor’s Report 61 FINANCIALS 63 Consolidated Financial Statements 70 Notes to the Consolidated Financial Statements 115 Alternative Performance Measures 119 Parent Company Financial Statements 121 Notes to the Parent Company Financial Statements 126 Proposed distribution of non-restricted equity 127 Auditor’s Report 130 SUSTAINABILITY 132 General information 148 Environmental information 179 Social information 199 Governance information 206 Other information 214 Auditor’s Report 220 The share 222 Our heritage 226 Definitions 222 OUR HERITAGE 61 FINANCIALS 130 SUSTAINABILITY 18 OUR STRATEGIC FRAMEWORK 13 CEO LETTER 7 HIGHLIGHTS Volvo Car Group’s formal Annual Report is presented on pages 29–35, 61–114, 119–126 and 130–213. Page 29–35, 61–114 and 119–126 has been audited, while the Sustainability Statement, which constitutes part of the Directors’ Report, included on page 130–213, has been subject to limited assurance, by the Group’s auditors. ===== SIDA 4 ===== Born in Sweden and now nearly 100 years old, we remain deeply rooted in our Swedish heritage. Through our history, Volvo Cars became synonymous with safety. And where safety once meant inventing the three-point seatbelt and sharing it globally, having helped save a million lives, our scope now also encompasses working to improve sustainability in mobility. Setting new standards Our ambition is to set new standards, whether through cus - tomer experience, electrification, manufacturing processes or carbon emissions reductions. Inspired by Swedish design and craftsmanship, we aim to create elegant, intuitive yet advanced products that address real-world needs - from how a car is purchased or leased to how it feels to drive and ride in and how it interacts with its surroundings. Electrification is key We are ready to go fully electric when our customers are. In a challenging market environment, we are taking decisive action to enhance resilience and position us for profitable growth. Our direction is clear: we will become a fully electric car company. Electrification is a key driver of future volume and profitability, and we are committed to leading this transition. We offer a strong line-up of fully electric cars. For those cus - tomers or markets not quite ready to make the shift we offer upgraded hybrid models as a bridge to an all electric future. Our customers set the pace. We are ready when they are. Perform and transform We are now accelerating efficiency and performance through targeted initiatives in organisation, leadership, product devel - opment, and manufacturing, complemented by a sharper focus on regionalisation and commercial execution. With the peak of our investment phase behind us, we are now aiming to increase margins and strengthening cash flow. By maintaining disci - plined cost control and driving operational excellence, we are executing our strategic roadmap and reinforcing a solid finan - cial foundation. Our strong focus on both performance and continued trans - formation ensures we remain competitive and resilient today, while positioning Volvo Cars for long-term growth and leader- ship in the future of mobility. A brand for people who care OUR BRAND / WHO WE ARE From the outset, Volvo Cars has been a brand for people who care about the world we live in and the people around us. We have made it our mission to make life easier, better and safer for everyone. We are driven by finding new ways to provide freedom to move in a personal, sustainable and safe way. Our brand is uniquely shaped by Sweden, combining Scandinavian design, with human centricity and durability in everything we do. We are committed to leadership in safety and a higher quality of life for people. For Life. Freedom to Move By Sweden For Life OVERVIEW PURPOSE ABOUT VOLVO CARS 2025 HIGHLIGHTS CEO LETTER MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 4 VOLVO CAR GROUP  / OVERVIEW / ABOUT VOLVO CARS ===== SIDA 5 ===== ~ 710,000 RETAIL SALES 24% PLUG IN HYBRID ~ 2,200 RETAIL LOCATIONS ~ 42,600 EMPLOYEES 21% FULLY ELECTRIC + 100 COUNTRIES SHARE OF RETAIL SALES China 21% US 17% Other 15% Europe 47% China 21% US 17% Other 15% Europe 47% We started in Sweden almost a century ago and have since built a strong footprint across Europe, Asia and the United States. Today, our cars are sold in more than 100 countries. As globalisation recedes, we are now adapting to a more regionalised landscape, tailoring our products, technologies, manufacturing, and commercial strategies to meet the specific needs of our customers in each region. Our over arching strategy is simple: to build where we sell. This model enhances our ability to respond to market dynamics and strengthens our resilience. A global brand – adapting to a more regionalised landscape READ MORE ABOUT REGIONALISATION ON PAGE 26 ~ 2,800 AMERICAS EMPLOYEES ~ 31,000 EUROPE EMPLOYEES ~ 8,800 ASIA EMPLOYEES BELGIUM GHENT CAR PRODUCTION JAPAN TOKYO APEC HQ SWEDEN GOTHENBURG GLOBAL HQ R&D DESIGN CENTRE CAR PRODUCTION STOCKHOLM TECH HUBUSA MAHWAH, NJ US/CANADA HQ CHARLESTON, SC CAR PRODUCTION BRAZIL SÃO PAULO LATAM LUND TECH HUB OLOFSTRÖM BODY COMPONENTS SKÖVDE E-MOTORS FLOBY BODY COMPONENTS POLAND KRAKOW TECH HUB SLOVAKIA KOŠICE CAR PRODUCTION MALAYSIA KUALA LUMPUR TECH HUB AND ASSEMBLY FACTORY SINGAPORE TECH HUB INDIA BANGALORE TECH HUB AND CONTRACT ASSEMBLY CHINA SHANGHAI GREATER CHINA HQ REGIONAL R&D AND DESIGN CENTRE CHENGDU CAR PRODUCTION DAQING CAR PRODUCTION TAIZHOU CAR PRODUCTION OVERVIEW PURPOSE ABOUT VOLVO CARS 2025 HIGHLIGHTS CEO LETTER MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 5 VOLVO CAR GROUP  / OVERVIEW / ABOUT VOLVO CARS ===== SIDA 6 ===== Volvo Cars offers a balanced portfolio of fully electric and hybrid cars, providing the strategic flexibility to leverage our strengths across diverse regional markets. Most recently, in January 2026 we launched the EX60 – the first car built on our new SPA3 platform. The new mid size electric SUV, EX60, is expected to be our next volume driver, com- pleting our offering in this important segment. During 2025, the fully electric ES90 and the XC70 long range PHEV were premiered. In the years to come, we will continue bringing new electric models to the market while also refreshing our plug-in hybrid cars for customers and markets that are not yet ready to fully transition. A balanced portfolio of fully electric and hybrid cars READ MORE ON PAGE 26 Current hybrid and long-range plug-in hybrid models Current fully electric models EX30 XC40 EC40 S60 EX40 EX60 V60 ES90 XC60 EX90 XC70 S90 EM90 XC90 OVERVIEW PURPOSE ABOUT VOLVO CARS 2025 HIGHLIGHTS CEO LETTER MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 6 VOLVO CAR GROUP  / OVERVIEW / ABOUT VOLVO CARS ===== SIDA 7 ===== Highlights OVERVIEW PURPOSE ABOUT VOLVO CARS 2025 HIGHLIGHTS CEO LETTER MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 7 VOLVO CAR GROUP ===== SIDA 8 ===== Operational highlights EX30 IN PRODUCTION NOW IN EUROPE In April, Volvo Cars started production of the fully electric EX30 small SUV at the manufacturing plant in Ghent, Belgium. Volvo Cars thereby continues to further diversify the global manufac - turing footprint for one of its most popular models, and expand production capacity to better meet local demand. LAUNCH OF COST AND CASH ACTION PLAN In April, Volvo Cars launched a cost and cash action plan totalling SEK 18 bn, including a global redundancy programme. 46% SHARE OF ELECTRIFIED CARS In 2025, Volvo Cars sold 323.3 thousand electrified cars, accounting for 46 per cent share of the total sales, whereas BEVs accounted for 21 per cent share of total sales. Volvo Cars continues on its path towards being a leading fully electric company, with plug-in hybrids as a prag- matic bridge to get there. CONTINUED INVESTMENTS IN THE US During the year, Volvo Cars announced the addition of the best-selling XC60 mid-size SUV to the production line of the US plant in Ridgeville, just outside Charleston in South Carolina. Further- more it was announced that before 2030, Volvo Cars plans to add a new, next-generation hybrid model to the Charleston plant. The coming new model is designed to meet the specific demands of the US market, in line with Volvo Cars increased focus on ensuring each region has the best product port- folio to meet customer demands. THE ALL-NEW, FULLY ELECTRIC VOLVO ES90 IN PRODUCTION THE NEW VOLVO XC70 LAUNCHED In September, Volvo Cars started produc- tion of the new, fully electric Volvo ES90. Built on the SPA2 architecture, the ES90 is designed to continuously evolve and improve through core computing tech- nology, constant connectivity and data. It was the first Volvo car to feature 800 volt battery technology, enabling longer range and faster charging. It is the sixth fully electric model in the line-up, joining the EX90, EM90, EX40, EC40 and EX30 as the journey towards full electrification continues. In August, the new Volvo XC70 SUV was revealed. The XC70 is Volvo Cars’ first long-range plug-in hybrid, offering an all-electric driving range of over 200km under the CLTC testing cycle. Built in collaboration with Geely, on the new Scalable Modular Architecture (SMA) platform for long-range plug-in hybrids, the new XC70 represents an important addition to Volvo Cars’ product lineup. It is designed to meet growing demand for longer-range plug-in hybrids, par- ticularly in China. Production and first deliveries were started in Q3. OVERVIEW PURPOSE ABOUT VOLVO CARS 2025 HIGHLIGHTS CEO LETTER MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 8 VOLVO CAR GROUP  / OVERVIEW / 2025 HIGHLIGHTS ===== SIDA 9 ===== “ Electrification is an opportunity for us and the main driver for growth. Besides that, the key building blocks for profitable growth are variable cost reductions supported by hardware synergies with Geely, further indirect cost reductions and structurally lower investments.” Håkan Samuelsson , President and CEO for Volvo Cars Our turnaround programme structured around Electrification, Regionalisation and Profitability, underpins our strategic direction. Electrification We continue our path towards being a leading fully electric company, with plug-in hybrids as a pragmatic bridge to get there. Regionalisation We are developing a more regional organisation with more empowered regions to faster adapt to a more regionalised world. Profitability We continue to safeguard our profitability and improve our cost position. Turnaround programme In a market undergoing rapid and profound transformation, we maintain a strong position supported by a trusted brand, a competitive portfolio of BEVs and PHEVs, and a solid financial foundation reinforced by recent cost and cash optimisation measures. Our new SPA3 platform provides access to one of the industry’s most advanced, uncompromised BEV architec - tures, while our collaboration with Geely secures a unique footprint in China and synergies beyond. With the heavy investment phase behind us, we are now structurally building a company geared toward a long-term EBIT margin above 8 per cent and strong positive cash flows through profitable electrified growth, increased synergies with Geely as well as indirect cost reductions. We are accelerating efficiency and performance through targeted initiatives in organisation, leadership, product development, and manufacturing, supported by a regionalised approach and commercial strategy with competitive and adapted offerings for each region. Our commitment to both performance and ongoing trans - formation ensures we remain competitive and resilient today, while positioning Volvo Cars for long-term growth and leader- ship in the future of mobility. OVERVIEW PURPOSE ABOUT VOLVO CARS 2025 HIGHLIGHTS CEO LETTER MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 9 VOLVO CAR GROUP  / OVERVIEW / 2025 HIGHLIGHTS ===== SIDA 10 ===== On 21 January 2026, Volvo Cars introduced the Volvo EX60, a new all-electric mid-size SUV, the first car built on the new SPA3 electric architecture. The EX60 changes the game in th e largest electric market segment in terms of range, charging speed, performance and price. The five-seater, family - friendly EX60 ends range anxiety, delivers a groundbreaking user experience and represents the next frontier in safety. It is also Volvo Cars’ first entry in the largest electric segment globally, allowing it to substantially increase Volvo Cars’ addressable market and electric market share. Launch of the EX60 EVENTS AFTER YEAR-END OVERVIEW PURPOSE ABOUT VOLVO CARS 2025 HIGHLIGHTS CEO LETTER MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 10 VOLVO CAR GROUP  / OVERVIEW / 2025 HIGHLIGHTS ===== SIDA 11 ===== Financial highlights • Retail sales decreased by –7 per cent to 710.0 (763.4) thousand cars. • Revenue amounted to SEK 357.3 (400.2) bn, primarily explained by lower whole- sale volumes and unfavourable sales mix and pricing, partially offset by increased used car sales. • Operating income (EBIT) was SEK 0.3 (22.3) bn, mainly impacted by items affecting comparability, a one-time non-cash impairment charge of SEK 11.4 bn and restructuring cost of SEK 0.8 bn. Excluding these, the decrease was mainly explained by sales mix and pric- ing as well as lower wholesale volumes and increased cost for tariffs and nega - tive foreign exchange impacts from a strengthened SEK. • EBIT margin was 0.1 (5.6) per cent. • Basic earnings per share was SEK 0.06 (5.17). • Operating and investing cash flow was SEK 2.4 (1.1) bn, primarily driven by lower investments, increased year-end pro- duction and proceeds from the divest- ment of shares in Lynk & Co. • The Board of Directors proposes that no dividend should be paid out. FORWARD LOOKING • For 2026, Volvo Cars aims to come back to volume growth on a year-on-year basis for the full year and increase cash generation with full year free cash flow clearly better than what was achieved in 2025. EBIT AND EBIT MARGIN (SEK BN/%) KEY FIGURES FINANCIALS (SEK m) REVENUE AND GROSS MARGIN (SEK BN/%) RETURN ON INVESTED CAPITAL, ROIC (%) 2025 2024 2023 Retail sales, units 710,042 763,389 708,716 Revenue 357,263 400,234 399,343 Research and development expenses –26,067 –16,983 –12,884 Operating income (EBIT) 303 22,318 19,939 Operating income (EBIT) excl. share o f income from JVs & associates –351 27,040 25,567 Operating income (EBIT), excl. Items affecting comparability 12,556 24,020 20,563 Net income –2,968 15,934 14,066 Basic earnings per share, SEK 0.06 5.17 4.38 EBITDA 35,679 45,048 37,388 Cash flow from operating activities 34,625 47,372 42,867 Cash flow from investing activities –32,176 –46,245 –51,842 Net cash 26,871 27,115 27,487 Gross margin, % 16.9 19.8 19.4 EBIT margin, % 0.1 5.6 5.0 EBIT margin excl. share of income fro m JVs & associates, % –0.1 6.8 6.4 EBITDA margin, % 10.0 11.3 9.4 Return on invested capital, ROIC, % 0.2 12.0 12.4 5 10 15 25 20 –1 3 2 1 00 4 5 8 6 7 21 2422 23 25 EBIT, SEK bn EBIT-margin, % EBIT-margin excl. share of income in JV & associates,% SEK bn % 21 2422 23 0 150 100 50 200 250 400 300 350 0 5 10 15 25 20 25 Revenue, SEK bn Gross margin, % SEK bn % 0 5 10 15 25 20 21 2422 23 25 Invested capital is calculated on two-year average figures. % OVERVIEW PURPOSE ABOUT VOLVO CARS 2025 HIGHLIGHTS CEO LETTER MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 11 VOLVO CAR GROUP  / OVERVIEW / 2025 HIGHLIGHTS ===== SIDA 12 ===== Sustainability highlights 2025 2024 2023 Climate Action   Reduction of CO 2 emissions per car, %1)2) 31 32 27  Electrified cars retail sales (BEVs and PHEVs), % 46 46 38  Climate neutral energy in own operations, % 87 78 74 Circular Economy   Water withdrawal reduction per manufactured car in own operation, %1) 29 20 25   Recirculation rate, % 95 94 87   Additional circular business revenue and cost savings, SEKm 1) 149 266 508 Responsible Business   The share of green debt, in accordance with our Green Financing Framework, or sustainability-linked format as percentage of outstanding debt, % 98 76 52   Women in senior leadership, %2) 29.1 29.7 —   Injury rate (LTCR) employees 0.06 0.05 0.06 1) Compared to the baseline 2018. 2) Historical figures have been updated. More information can be found on page 207. For further definitions and reporting principles, see Sustainability Statement, starting on page 130. 88 SAFEGUARD HUMAN RIGHTS High-risk sites in value chain assessed on responsible business conducts, including supplier audits and People Policy Assessments. 27% 31% INCREASE RECYCLED MATERIAL IN OUR CARS CO2 EMISSIONS REDUCTION PER CAR With 27 per cent recycled material in the EX60, the 2025 ambition of 25 per cent recycled and bio-based material in new car models was achieved. We achieved a 31 per cent reduction in CO2 emissions per car, reaching our 2025 ambition and strengthening our momen- tum toward our ambition for net zero. 29% WATER WITHDRAWAL REDUCTION PER MANUFACTURED CAR Water efficiency measures resulted in a decrease of water withdrawal in absolute terms and in relation to manufactured cars. KEY FIGURES SUSTAINABILITY • We met our 2025 CO2 ambition with 31 per cent CO2 emission reduction per car, compared to the baseline 2018. Electrified car sales reached 46 per cent, contributing to reducing tailpipe CO2 emissions by 42 per cent. • Climate neutral energy in own operations reached 87 per cent. In 2025, four of our facto - ries have transitioned to climate neutral energy meaning seven out of nine production sites are fully climate neutral. • Two new electrified cars were launched, the ES90 and XC70, extending our portfolio and meeting the customer demands. • Progress on circular business through a contract for closed loop steel that helps mitigate cost for recycled materials. • Industry-leading workplace safety achieved with an injury rate (LTCR) of 0.06. • Processes within our human rights due dili - gence were enhanced, including conducting 88 (96) audits and People Policy Assessments in high-risk sites in our value chain as well as addressing 85 per cent of corrective action plans from previous RBA VAP audits. • The share of green debt, in accordance with our Green Financing Framework, or sustaina - bility-linked format increased to 98 per cent of outstanding debt. The issuance of our fifth green bond contributed to closing in on our 100 per cent ambition 2025. SUBSEQUENT EVENTS • The new EX60 was launched in January 2026. With 27 per cent recycled content, it overa - chieves our 2025 ambition of 25 per cent in new car models and sets new standards with the lowest CO 2 footprint in our fleet to date. • The new multi-adaptive safety belt was launched in the new EX60 demonstrating a continued focus on innovative technology to improve safety in our cars. OVERVIEW PURPOSE ABOUT VOLVO CARS 2025 HIGHLIGHTS CEO LETTER MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 12 VOLVO CAR GROUP  / OVERVIEW / 2025 HIGHLIGHTS ===== SIDA 13 ===== In April last year I returned to Volvo Cars. It has been an exciting yet demanding year since then. The automotive industry has seldom been faced with so many new challenges at the same time. Slowing growth, regionalisation of the world, a transition towards electrification and software-defined cars, as well as intensifying competition from new Chinese car makers. With all this uncertainty, it can be easy to lose perspective. For us however, the future of our company is clear. Some years ago, we made the bold decision that the future of Volvo Cars must be electric. Today, we’re even more convinced that this is the right choice. Not only to address the climate challenge, but also to meet customers’ expectations for better and more attractive cars. This is where our recently revealed EX60 model comes in. Just like the XC90 marked the beginning of a new era in 2014, the EX60 signals the next chapter for Volvo Cars as leader in the all-electric premium segment. We know that some people still hesitate to go all-electric for three main reasons: concerns about range, charging time and price. With the EX60, we directly address these concerns. It has class-leading range similar to many petrol cars. Charging stops take just as long as a normal fuel and coffee stop. Focused on a clear strategic roadmap as well as short-term performance And most importantly, the EX60 will be priced in line with our best-selling XC60 plug-in hybrid. On top of that, it will be offered in a new commercial concept, designed around simplicity, trans- parency and precision. Well-positioned to grow Equally important is that the EX60, with its game-changing new technologies, shows how we can meet the expectations of our customers while growing volume and profitability. We are structurally building a company towards a long-term EBIT margin of over 8 per cent, strong positive cash flows and growth driven by electrification. OVERVIEW PURPOSE ABOUT VOLVO CARS 2025 HIGHLIGHTS CEO LETTER MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 We are structurally building a company towards a long-term EBIT margin of over 8 per cent, strong positive cash flows and growth driven by electrification. 13 VOLVO CAR GROUP  / OVERVIEW / CEO LETTER ===== SIDA 14 ===== With a strong electric product portfolio, built on the new cost-efficient and scalable SPA3 architecture, Volvo Cars is well-positioned to make this happen. I believe that we are also in a better position than our peers to tackle the growing competition from Chinese automakers, both within China and in Europe. Our unique relationship with Geely gives us the opportunity to work even closer to lower development costs and to bring new cars to the market quicker. Together we are creating a leaner, more resilient supply chain. The XC70 long-range plug-in hybrid shows how this works in practice and can deliver quick results. The successful execution of our cost and cash action plan during 2025 is a good foundation for further profitable growth. In 2026 we will continue to focus on lowering variable and indi - rect costs, in combination with actions to increase sales. An encouraging sustainability development Summarising 2025 should also include our sustainability progress. The commitment to becoming an electric car maker underpins our sustainability ambitions for 2030 and beyond and we are ahead of our competitors on most sustainability metrics. I’m particularly proud to see that we achieved our goal of reducing our CO2 footprint with a 31 per cent reduction per car compared with the 2018 baseline. We also made significant progress in usage of climate neutral energy in our operations and we achieved climate neutral status at seven of our nine manufacturing plants. In terms of our products’ footprint, the new EX60 leads by example. It has the lowest carbon footprint of any electric Volvo car, matching that of the much smaller EX30. The EX60 also comes with the highest amount of recycled materials in any electric Volvo. In addition, the introduction of mega casting and cell-to-body on the SPA3 platform further reduces manu - facturing waste and material use. The right strategy We are navigating one of the most challenging periods that I have seen the industry go through. However, I am confident that Volvo Cars has the right strat- egy to ride the storm and emerge as a stronger, more profitable company. We will continue a resolute execution of our longer-term strategy and at the same time focus on shorter-term improve - ments of both cost and sales performance. Håkan Samuelsson CEO, Volvo Cars SHARE OF ELECTRIFIED SALES 46% FREE CASH FLOW SEK BN We will continue a resolute execution of our longer-term strategy and at the same time focus on shorter-term improvements of both cost and sales performance. 0 2221 23 24 25 SEK bn –9,0 3,0 OVERVIEW PURPOSE ABOUT VOLVO CARS 2025 HIGHLIGHTS CEO LETTER MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 14 VOLVO CAR GROUP  / OVERVIEW / CEO LETTER ===== SIDA 15 ===== Market OVERVIEW 3 MARKET OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 15 VOLVO CAR GROUP ===== SIDA 16 ===== Sales and market development Throughout the full year 2025, the global passenger car market operated under challenging and uneven conditions, influenced by a combination of macroeconomic pressures, geopolitical tensions, as well as regulatory and trade-related developments. The industry’s transition towards electrification progressed at a moderated pace during 2025. Overall, the year was characterised by restrained demand and intensified competition. The profitability of the industry has been under pressure especially in the light of tariffs and writedowns by several OEMs, leading to a heightened focus on profitability as well as efficiency. Volvo Cars’ full-year retail deliveries reached 710.0 (763.4) thousand cars. Wholesales decreased by 11%, and production decreased by 9% to 694.2 (760.4) thousand cars. Despite the headwinds during 2025, Volvo Cars remained committed to navigating uncertainty while positioning the business for sustainable growth. The focus remains on efficiency, cost control and strengthening the core business, providing a solid foun - dation for when market conditions stabilise. Sales of BEVs decreased by 13% to 151.8 (175.2) thousand cars, and PHEV sales decreased by 3% compared to 2024. Europe The overall European passenger car market increased by 2% compared to 2024, while the premium car market declined by 4%. The electrified segment continues to show momentum, with both BEV and PHEV sales increasing by 27% and 35% respectively. China The total Chinese passenger car market increased by 2% year-on-year, of which the BEV segment increased by 28% and the PHEV segment increased by 5%. The premium segment decreased by 15% compared to 2024. Consumer demand continues to shift from combustion-engine models to electrified cars, where competition is intense and domestic brands are dominating. US The total US passenger car market increased by 3% compared to 2024, and the premium market increased by 1%. BEV sales increased by 6% while PHEV sales decreased with 9%. The US automotive market contin - ued to be affected by evolving policy conditions, trade dynamics and broader economic uncertainty. Volvo Cars’ market share per propulsion type, % 1) 2) Full year 2025 Full year 2024 BEV 1.16 1.46 PHEV 3.07 3.80 ICE (incl. mild hybrids) 0.75 0.72 Volvo Cars’ share of total market 1.00 1.04 Total industry volume share and growth by propulsion type, % 1) 2) Full year 2025 Full year 2024 BEV 19 16 EREV 2 — PHEV 8 7 ICE (incl. mild hybrids) 72 77 Total 100 100 1) Volvo Cars is and will continue to be positioned in the premium segment of the automotive market. As the market is transforming with electrification and digitalisation the definition of premium is being redefined. To simplify and to avoid the risk of excluding important parts of the market, market share is reported in relation to the global passenger market. 2) Includes content supplied by S&P Global Mobility Industry Performance, February 2026, capturing more than 85 per cent of total world sales. All rights reserved. Retail sales (k units) 2025 2024 2023 Europe 332.7 369.7 294.8 China 149.5 156.4 170.1 US 121.6 125.2 128.7 Other 106.2 112.1 115.1 Retail sales total 710.0 763.4 708.7 Electrified cars 323.3 352.8 266.0  whereof BEVs 151.8 175.2 113.4 Electrified cars share 46% 46% 38%  whereof BEV share 21% 23% 16% Wholesales 693.0 782.6 732.3 Production volume 694.2 760.4 766.7 Global automotive market OVERVIEW 3 MARKET GLOBAL AUTOMOTIVE MARKET MARKET DEFINING TRENDS OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / MARKET  16 ===== SIDA 17 ===== Climate change, as a part of the triple planetary crisis (climate change, biodi- versity loss and pollution) is reshaping society, driving shifts in attitudes, poli- cies, and innovation. Transportation is a major source of emissions, making the transition to battery electric vehicles critical. BEVs are the fastest-growing segment in the passenger car market. Despite some headwinds and some- what softer demand than expected, global BEV sales rose by 23 per cent in 2025. CLIMATE CHANGE AND ELECTRIFICATION Volvo Cars is fully committed to reduc- ing emissions across the entire value chain. Electrification remains central to our strategy for eliminating tailpipe emissions, and we continue t o expand our range of electric vehicles. Mean- while, we are refreshing our plug-in hybrid (PHEV) cars for customers and markets that are not yet fully ready to transition. Market defining trends The retreat of globalisation and the rise of geopolitical polarisation are reshap- ing the global landscape, wit h long-term consequences that remain uncertain. Political instability and unpredictability are becoming the new normal, while competition – particularly from emerg- ing Chinese OEMs – is intensifying. In this environment being adaptable and agile is no longer optional, it is essential for building resilience and driving long-term value creation. POLARISATION, DEGLOBALISATION AND REGIONALISATION As globalisation recedes, we are adapt- ing to a more regionalised world. This shift calls for a tailored approach across product development, tech- nology, manufacturing, and commercial strategy. By empowering our regions to respond to local customer needs and market dynamics, we enhance our resilience and position ourselves for sustainable and profitable growth. Innovation in the automotive industry is accelerating. Advances in battery tech- nology and charging infrastructure drive electrification, while software-defined vehicles transform design and user experience. AI is optimising processes and enables faster responses to market demands. The convergence of comput- ing power, connectivity, and data ana- lytics, combined with AI, ushers in a new technological era, redefining mobility and making adaptability and innovation more critical than ever. TECHNOLOGY AND AI We continue to test and deploy at speed with clear intent, unlocking benefits such as lower costs. Super- computers and in-house software now pave the way for next-generation infotainment systems, over-the-air upgrade capabilities, enhanced safety, energy management, and other services. The automotive industry is undergoing intense disruption and competition. Electrification and software-defined vehicles are accelerating innovation cycles, while geopolitical tensions and trade barriers are reshaping global supply chains. Legacy automakers face growing competition from agile start- ups and rapidly expanding Chinese brands. HYPER COMPETITION Volvo Cars tackles intense competition with a focus on electrification, agility, and regionalisation – tailoring products, manufacturing and commercial strate- gies to local market needs. Collabora- tion, especially with Geely, accelerates innovation, reduces costs, and speeds up time-to-market. Hardware synergies with Geely, the third largest BEV player in the world gives Volvo Cars an unique position, especially in China. This approach strengthens competitiveness and resilience amid industry disruption. Volvo Cars’ approach OVERVIEW 3 MARKET GLOBAL AUTOMOTIVE MARKET MARKET DEFINING TRENDS OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / MARKET  17 ===== SIDA 18 ===== Our strategic framework OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 1818 VOLVO CAR GROUP ===== SIDA 19 ===== OUR PURPOSE – WHY WE ARE HERE Our reason for existing and the impact we strive to make. To provide freedom to move in a personal, sustainable and safe way. READ MORE ON PAGE 2 OUR BRAND – WHO WE ARE The identity and values that define us. Freedom to move. By Sweden. For life. READ MORE ON PAGE 4 OUR CULTURE & LEADERSHIP – HOW WE ACT The behaviors and leadership principles that create the environment w e want. How we work is just as important as what we do. READ MORE ON PAGE 20 OUR STRATEGIC DIRECTION – WHERE WE WANT TO BE Our strategy for the future and the path to get there. READ MORE ON PAGES 21–28 OUR ACTIONS – WHAT WE NEED TO DELIVER NOW The priorities and initiatives that turn strategy into reality. Our strategic framework is the foundation that guides everything we do OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK OUR GUIDING PRINCIPLES OUR STRATEGIC DIRECTION CUSTOMER EXPERIENCE COMMITTED ORGANISATION ELECTRIFICATION AND REGIONALISATION DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 19 VOLVO CAR GROUP  / OUR STRATEGIC FRAMEWORK ===== SIDA 20 ===== Culture We keep it simple: We reduce complexity, focus on what matters most and make it easier for everyone to work better together. We stay curious: We keep learning, ask ques- tions, seek insights and explore new ideas to drive speed and innovation. We are all in: We work as one team, commit to delivering high quality results and do not give up even when things get difficult. Leadership Create clarity: We ensure our teams are focused on the right things. We communicate clearly to enable faster execution. Lead with courage: We dare to take decisions and step forward in uncertainty. We have open conversations to achieve high performance. Take full ownership: We act responsibly, follow through and own results. We role model account- ability and empowering everyone to grow. Our guiding principles OUR CULTURE AND LEADERSHIP / HOW WE ACT READ MORE ON PAGE 200 We focus on strengthening trust, uniting our teams, and creating long-term value by evolving how we think, act, lead, and work together – guided by our shared culture that is everyone’s responsibility. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK OUR GUIDING PRINCIPLES OUR STRATEGIC DIRECTION CUSTOMER EXPERIENCE COMMITTED ORGANISATION ELECTRIFICATION AND REGIONALISATION DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 20 VOLVO CAR GROUP  / OUR STRATEGIC FRAMEWORK ===== SIDA 21 ===== Human-centric customer experience We build lasting consumer relationships aligned with our purpose: Personal, Sustainable and Safe. We provide a premium offering across channels, aligned with consumer expectations. High-performing committed organisation We are a lean organisation with a regional structure that enables speed, synergies and customer proximity. We develop our people, foster a growth mindset and build a high-performance culture. Premium electrified products for a regionalised world We are committed to cost-efficient electrification with hybrids as a bridge. We are leaders in purposeful technology and real-life safety. Our strategic direction to profitable growth READ MORE ON PAGE 22 READ MORE ON PAGE 24 READ MORE ON PAGE 26 OUR STRATEGIC DIRECTION / WHERE WE WANT TO BE Our strategic direction to profitable growth is unmistakable: we are building a stronger, more profitable Volvo Cars. We are taking decisive actions to structurally position the company for long-term success – targeting an EBIT margin of over 8 per cent, strong positive cash flows, and growth through electrification. Our strategic direction is built on three pillars: Human-centric customer experience, High-performing committed o rganisation and Premium electrified products for a regionalised world. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK OUR GUIDING PRINCIPLES OUR STRATEGIC DIRECTION CUSTOMER EXPERIENCE COMMITTED ORGANISATION ELECTRIFICATION AND REGIONALISATION DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 21 VOLVO CAR GROUP  / OUR STRATEGIC FRAMEWORK ===== SIDA 22 ===== Safety is our founding principle and remains at the heart of everything we do. Sustainability is not a checkbox, but a core responsibility, to the planet and to our business. Technology is never added for its own sake, but only when it truly enhances people’s lives. This purposeful approach defines who we are and how we will shape the future of mobility, while delivering an exceptional customer experience. When it comes to our cars, we are convinced that the future is electric, because it is simply the better choice. We are ready to go fully electric when our customers are. Today, we offer fully electric models for those ready to make the shift, and plug-in hybrids for markets and customers still transitioning. Step by step, we are removing the key barriers of range, charging speed, and cost, to make full electrification more accessible. Improving the buying experience – with possibility for instant delivery We are also making changes to how we package our various offerings. Buying a car should be hassle-free. Customers deserve clarity on what is included, transparent pricing, and flexible time- lines based on individual preferences. Simplicity, transparency, and precision are essential to building lasting relationships, and we are now driving improvements across all these areas. Through an ongoing pilot in Sweden, we are introducing a new, convenient way to purchase a car online. Customers can choose when their preferred car will be delivered – from immediate deliv- ery to a time that best suits their individual needs. We are also simplifying the offering by reducing the number of variants, making it easier for customers while reducing complex- ity for us. For those customers who prefer a complete solution, we aim to provide a transparent consumer-friendly monthly price that covers everything – from home charging solutions to insur- ance, maintenance and other services simplifying the ownership. Variant reductions further support a faster order-to-delivery pro- cess with more digitalised tools and predictability, enabled by AI. Human-centric customer experience Everything starts with our brand – to offer something truly different with human centricity across everything we do and aligned with our purpose: Personal, Sustainable, and Safe. Across all channels, we are aiming to provide a premium experience tailored to consumer expectations and designed to meet their needs seamlessly. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK OUR GUIDING PRINCIPLES OUR STRATEGIC DIRECTION CUSTOMER EXPERIENCE COMMITTED ORGANISATION ELECTRIFICATION AND REGIONALISATION DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 22 VOLVO CAR GROUP  / OUR STRATEGIC FRAMEWORK ===== SIDA 23 ===== Marketing is a key driver of growth and prof- itability. With our new approach, we aim to attract more customers to the Volvo Cars brand while lowering overall costs. Rather than broad, one-size-fits-all campaigns, we will focus on flagship models in priority loca - tions and markets, creating powerful halo effects that elevate our entire portfolio and secondary markets. This shift is supported by a truly data- driven approach, where marketing spend is continuously optimised based on what drives brand impact and sales. Through A/B/C test- ing and AI-enabled tools, we can quickly evaluate and refine campaigns across all channels. The direct connection between the ad and offer on the website further creates efficiency, shortening the lead-to-buy process and acquisition cost. This strategy enables us to deliver more relevant, locally adapted messaging while reducing total marketing spend per car. NEW APPROACH TO MARKETING: Leveraging halo strategies to strengthen brand perception and reduce cost OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK OUR GUIDING PRINCIPLES OUR STRATEGIC DIRECTION CUSTOMER EXPERIENCE COMMITTED ORGANISATION ELECTRIFICATION AND REGIONALISATION DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 23 VOLVO CAR GROUP  / OUR STRATEGIC FRAMEWORK ===== SIDA 24 ===== Greater accountability, improved efficiency, and faster decision-making To support our ambition for profitable growth, we are now implementing changes in our organisation and in the way we work. Our new simplified structure is guided by the principle that structure alone does not drive success. True performance comes from the ability to seamlessly collaborate across func - tions, enabling greater accountability, improved efficiency, and faster decision-making. The approach includes fewer organisa - tional layers, a reduction in managerial roles, and positions with broader scope and increased responsibility. A regional structure designed to enable speed and customer proximity To enable speed, create synergies, and maintain strong cus - tomer proximity, we will operate as a lean organisation with a regional structure. This approach allows us to respond quickly to market changes, leverage local insights, and deliver consist - ent value across regions. By reducing complexity and fostering collaboration, we ensure agility and efficiency in every part of the business. Regionalisation enables a tailored approach in our key regions across product, technology, manufacturing, and commercial areas. This empowers regions to meet customer and retailer needs faster, driving growth. The shift strengthens local account - ability and decision-making while aligning roles with business priorities. We will also develop and track certain regional metrics to measure holistic performance across all functions. Culture and Leadership – Driving Performance and Engagement At the same time, we focus on developing our people, fostering a growth mindset, and building a high-performance culture. This means empowering teams with the right tools, encouraging inno - vation, and embedding accountability and continuous improve - ment in daily work. Our goal is to combine operational excellence with an engaged workforce for sustainable growth. Our Culture and Leadership Principles guide behaviors, deci - sions, and collaboration across the organisation. By embracing these principles, we create an environment where innovation and teamwork thrive – driving long-term high performance. A high-performing committed organisation As part of our transformation journey, we are now implementing a simplified, regional structure that enhances speed, accountability, and customer focus, while embedding a culture of innovation and high performance. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK OUR GUIDING PRINCIPLES OUR STRATEGIC DIRECTION CUSTOMER EXPERIENCE COMMITTED ORGANISATION ELECTRIFICATION AND REGIONALISATION DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 24 VOLVO CAR GROUP  / OUR STRATEGIC FRAMEWORK ===== SIDA 25 ===== In 2025, Volvo Cars launched an accelerated cost and cash action plan totaling SEK 18 billion. As part of the action plan, redundancies were announced. In all, 3,000 positions including consultants, were affected. These structural changes were consid - ered essential to deliver on our cost efficiency ambitions, while also improving operational effi - ciency and accelerating decision-making. The redundancy process was guided by fairness and respect for each individual, transparency and strategic alignment. Decisions were based on length of employment and qualifications, aligned with union agreements. Every position was evalu - ated for affordability and long-term sustainability rather than competence shift. Looking ahead, our goal is a right-sized organisation that is lean, effi - cient and future ready. We are embedding flexibil - ity through global standards with room for regional adjustments, ensuring resilience in a changing industry. Organisation fit for the future OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK OUR GUIDING PRINCIPLES OUR STRATEGIC DIRECTION CUSTOMER EXPERIENCE COMMITTED ORGANISATION ELECTRIFICATION AND REGIONALISATION DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 25 VOLVO CAR GROUP  / OUR STRATEGIC FRAMEWORK ===== SIDA 26 ===== Premium electrified products for a regionalised world Electrification is not just a technological shift – it is a significant opportunity for Volvo Cars to grow profitably. Going forward, we will capitalise on our game- changing, uncompromised BEV architecture, as well as our hardware collaboration with Geely and our regionalised approach, to offer competitive and tailored products for each market. And by introducing long-range PHEVs, we will also bridge the gap for customers not yet ready to make the full transition to electric mobility. Regionalisation: supporting a stronger offer and increased profitability As globalisation recedes, we need to adapt to a more regional - ised world. This shift calls for a tailored approach across prod - uct development, technology, manufacturing, and commercial execution. By tailoring cars to specific market needs and cus - tomer groups – using the right materials and technologies, built in the right locations – we aim to reduce logistical and tariff costs, while boosting growth. By empowering our regions to respond to local customer needs and market dynamics, we enhance our resilience and position ourselves for sustainable growth. Electrification: The way forward Our commitment to going fully electric remains unwavering. In 2025, 46% of our total sales were electrified, including both fully electric and plug-in hybrid models, with nearly one in five cars sold being fully electric. We have a strong BEV portfolio and the new EX60, intro - duced in the beginning of 2026, will significantly increase our potential customer base as we now enter the largest and most popular fully electric segment. The EX60 is a game-changer in terms of price, performance and cost. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK OUR GUIDING PRINCIPLES OUR STRATEGIC DIRECTION CUSTOMER EXPERIENCE COMMITTED ORGANISATION ELECTRIFICATION AND REGIONALISATION DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 26 VOLVO CAR GROUP  / OUR STRATEGIC FRAMEWORK ===== SIDA 27 ===== A pragmatic approach While we are ready to go fully electric when our customers are, varying rates of market adoption will mean different transition speeds across regions. Demand for plug-in hybrids remains stronger than expected, so to meet diverse local needs, we are taking a pragmatic approach to our product strategy. Accord - ingly, we will shape our PHEV lineup to provide an attractive bridge for customers who want the benefits of a BEV but need the back-up plan for occasional longer journeys – particularly where charging infrastructure is still developing. We are making affordable investments into substantial design and hardware upgrades for our existing line-up of PHEVs, making them even more compelling and relevant. And our second- generation PHEVs, which will deploy the battery as the primary power source with an engine as a back-up, will complete the bridge towards electrification without the need for investment in new platforms. Increased collaboration with Geely To further reduce costs and accelerate time-to-market, we will expand our collaboration with Geely. The collaboration aims to enable global hardware synergies, scale in Eastern technol - ogy for China and collaborate on local products with shared componens. Th e ambition is to increase synergies by leveraging scale, reducing variants and increase commonality across prod - ucts and platforms. Focusing on hardware, we aim to increase common volumes of standardised modules. This will enhance our sourcing power, improve access to innovation and technol - ogy, reduce complexity, streamline development, and strengthen resilience. For software there will be a clear separa - tion between the Eastern and Western software stacks, where Eastern technology for China will be in focus. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK OUR GUIDING PRINCIPLES OUR STRATEGIC DIRECTION CUSTOMER EXPERIENCE COMMITTED ORGANISATION ELECTRIFICATION AND REGIONALISATION DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 27 VOLVO CAR GROUP  / OUR STRATEGIC FRAMEWORK ===== SIDA 28 ===== The launch of the EX60 marks the debut of SPA3 – our first uncompromised BEV platform, delivering unprecedented scalability and flexibility for future models. SPA3 brings profound improvements on how we design, develop, manufacture and improve cars. With the new plat - form we will for the first time in history be able to continu - ously develop and build cars of all sizes – larger than the EX90 and smaller than the EX30 – using the same technol - ogy base. The platform will be transformative for the prod - ucts themselves, for our customers, and for our cost base. By removing the constraints of the combustion engine, SPA3 unlocks entirely new ways to scale and modularise Fully software defined (one-track software) SPA3 underlines our leadership in software defined vehicles. Underpinned by one software stack, all our engineering efforts can now be focused on a single direction to power all our products. This approach ensures our cars improve over time through continuous innovation and over-the-air updates. It simplifies vehicle architecture by centralising computing, reducing hardware complexity and cost. This approach enhances safety, personalisation, and connectivity. It also supports faster development cycles, better data utilisation, and improved sustainability by extending hardware lifecycles through software upgrades. All-in-all, this will bring transformative advantages for the products themselves, for our customers, and for our cost base. cars, enabling a unified setup for batteries, e-machines, climate control, chassis, and electronics. Lower costs and accelerated innovation Vertical integration of owned key technologies, like electric motors, and software – reduces dependency on suppliers, lowers costs, and accelerates innovation. Meanwhile horizon - tal optimisation – leveraging shared platforms, components, and partnerships across products – reduces complexity, increases commonality, and improves economies of scale. Combined, they will strengthen resilience, streamline devel - opment, and support profitable growth in a competitive EV market. SPA3 – A game changer OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK OUR GUIDING PRINCIPLES OUR STRATEGIC DIRECTION CUSTOMER EXPERIENCE COMMITTED ORGANISATION ELECTRIFICATION AND REGIONALISATION DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 28 VOLVO CAR GROUP  / OUR STRATEGIC FRAMEWORK ===== SIDA 29 ===== Directors’ report OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 29 VOLVO CAR GROUP ===== SIDA 30 ===== The Volvo Car Group Volvo Car AB (publ.) together with its wholly-owned subsidiary Volvo Car Corporation and its subsidiaries are jointly referred to as “Volvo Car Group” or “Volvo Cars”. Volvo Car AB (publ.), registration number 556810-8988, with its registered office in Gothenburg, Sweden, is a publicly listed com - pany on the Nasdaq Stockholm Stock Exchange traded under the ticker VOLCAR. The largest owner, holding 78.65 per cent of shares and capital, is Geely Sweden Holdings AB, owned by Shanghai Geely Zhaoyuan International Investment Co., Ltd., registered in Shanghai, China, and ultimately owned by Zhejiang Geely Holding Group Ltd., registered in Hangzhou, China. Volvo Car AB (publ.) holds shares in its subsidiary Volvo Car Corporation and provides the Group with certain financing solutions. Volvo Car AB (publ.), indirectly through Volvo Car Corporation and its subsidiaries, operates in the automo - tive industry with business relating to design, development, manu - facturing, marketing and sale of cars and thereto related services. Board of Directors’ Report Volvo Cars’ sales development Throughout the full year 2025, the global passenger car market operated under challenging and uneven conditions, influenced by a combination of macroeconomic pressures, geopolitical tensions, as well as regulatory and trade-related developments. The industry’s transition towards electrification progressed at a moderated pace during 2025. Overall, the year was characterised by restrained demand and intensified competition. The profitability of the indus - try has been under pressure especially in the lights of tariffs and writedowns by several OEM’s, leading to a heightened focus on profitability as well as efficiency. Volvo Cars’ full-year retail deliveries reached 710.0 (763.4) thousand cars. Wholesales decreased by 11 per cent, and production decreased by 9 per cent to 694.2 (760.4) thousand cars. Despite the headwinds during 2025, Volvo Cars remained committed to nav - igating uncertainty while positioning the business for sustainable growth. The focus remains on efficiency, cost control and strength - Key ratios, SEKm 2025 2024 2023 2022 2021 Retail sales, units 1) 710,042 763,389 708,716 615,121 698,693 Revenue 357,263 400,234 399,343 330,145 282,045 Research and development expenses –26,067 –16,983 –12,884 –11,514 –12,714 Operating income, EBIT 2) 303 22,318 19,939 22,332 20,275 EBIT excl. share of income from JVs and associates 2) –351 27,040 25,567 17,889 21,226 EBIT excl. Items affecting comparability 2) 12,556 24,020 20,563 16,433 16,995 Net income –2,968 15,934 14,066 17,003 14,177 Basic earnings per share, SEK 0.06 5.17 4.38 5.23 4.72 EBITDA2) 35,679 45,048 37,386 38,423 35,280 Cash flow from operating activities 34,625 47,372 42,867 33,599 29,852 Cash flow from investing activities –32,176 –46,245 –51,842 –39,658 –34,737 Net cash 2) 26,871 27,115 27,487 38,061 44,846 Gross margin, % 2) 16.9 19.8 19.4 18.3 21.6 EBIT margin, % 2) 0.1 5.6 5.0 6.8 7.2 EBIT margin % excl. share of income from JVs and associates 2) –0.1 6.8 6.4 5.4 7.5 EBIT margin % excl. Items affecting comparability 2) 3.5 6.0 5.1 5.0 6.0 EBITDA margin, % 2) 10.0 11.3 9.4 11.6 12.5 Equity ratio, % 39.8 36.6 36.6 35.4 33.4 Return on invested capital, ROIC, % 2) 0.2 12.0 12.4 16.7 18.6 1) Non-financial operating metric. 2) Non-IFRS measure (alternative performance measure), see Alternative performance measures on page 115. ening the core business, providing a solid foundation for when market conditions stabilise. Sales of BEVs decreased by 13 per cent to 151.8 (175.2) thousand cars, and PHEV sales decreased by 3 per cent compared to 2024. Retail sales (k units) 2025 2024 Change % Europe 332.7 369.7 –10 China 149.5 156.4 –4 US 121.6 125.2 –3 Other 106.2 112.1 –5 Retail sales total 710.0 763.4 –7 Electrified cars 323.3 352.8 –8 whereof BEVs 151.8 175.2 –13 Electrified cars share 46% 46% whereof BEV share 21% 23% Wholesales 693.0 782.6 –11 Production volume 694.2 760.4 –9 Retail sales by model (k units) 2025 2024 BEV EX30 78.6 98.1 EX40 44.0 53.4 EX90 16.3 1.8 EC40 11.8 20.4 EM90 0.8 1.5 ES90 0.3 — Non-BEV XC60 230.7 230.9 XC40 123.0 120.5 XC90 103.2 108.6 V60 27.1 34.1 S60 26.3 44.0 S90 25.7 40.2 XC70 14.2 — V90 8.2 9.9 Total 710.0 763.4 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / DIRECTORS’ REPORT  30 ===== SIDA 31 ===== Events during the reporting period Two major tech upgrades in new Volvo cars In January, it was announced that for the upcoming model year, there will be two main tech upgrades for the XC40, EX40, EC40, S60, V60, V60 Cross Country, V90 and V90 Cross Country models. Volvo Cars is introducing our new-generation, new-look user expe - rience to our whole lineup, as well as the ultra-fast Snapdragon® Cockpit Platform from Qualcomm Technologies, Inc. This makes the infotainment system much faster and much more responsive. Addi - tionally, EX30, EX40 and EC40 models in Europe will get the service Plug & Charge, for an even smoother public charging process. EX30 Cross Country unveiled In February, Volvo Cars unveiled the new Volvo EX30 Cross Country. It is an all-road car that delivers safety, comfort and performance in a capable and adventurous package. The Volvo EX30 Cross Country is available to order in selected markets. Volvo Cars completed the divestment of its 30 per cent shareholding in Lynk & Co In February, Volvo Cars divested its 30 per cent shareholding in Lynk & Co Automotive Technology Co., Ltd to Zhejiang Zeekr Intelligent Technology Co., Ltd., after approval at an Extraordinary General Meeting of Volvo Cars’ shareholders, as well as other regulatory approvals. Volvo Cars revealed the all-new, fully electric Volvo ES90 In March, Volvo Cars revealed the ES90 which is the latest addition to the balanced product portfolio of premium Volvo cars. The ES90 is the second car on the SPA2 platform equipped with a core com - pute system and built on the Volvo Cars Superset Tech Stack. It was then the sixth fully electric model in the line-up, joining the EX90, EM90, EX40, EC40 and EX30 as the journey towards full electrifica - tion continues. Volvo Cars uses AI and virtual worlds with the aim of creating safer cars In March, Volvo Cars announced it is using AI-generated life-like virtual worlds to enhance the development of its safety software, such as driver assistance systems (ADAS), all with the aim of creat - ing even safer cars. From now on Volvo Cars can synthesise incident data collected by the advanced sensors in new Volvo cars, such as emergency braking, sharp steering or manual intervention, which allows Volvo Cars to probe, reconstruct and explore them in new ways to better understand how incidents can be avoided. The new Volvo S90 revealed for Asian market In April, the new plug-in hybrid Volvo S90 was revealed for Asia. The new S90 features our new-generation user interface, which, as previously announced, is coming to our total line-up. In September production started, using climate-neutral energy in Volvo Cars’ Chengdu plant. Cost and cash action plan of SEK 18 billion In April, Volvo Cars launched an accelerated cost and cash action plan, totalling SEK 18 billion, to protect profitability, drive structural efficiencies on direct and indirect spend, as well as helping to offset external headwinds. The plan was executed during the year, with removal of 3,000 positions, variable costs efficiencies from accel - erated work on driving synergies through closer collaboration with Geely, and cutting back on planned investments to improve cash flow while safeguarding our future. Volvo Cars and Google expand partnership In April, Volvo Cars announce d an expanded partnership with Google , to more rapidly deliver the latest Android Automotive OS innovations to customers that own Volvo models with Google built-in. Volvo Car s will now serve as one of Google’s reference hardware platforms for future Android development in cars. Volvo EX90 awarded In April, the all-electric Volvo EX90 was appointed the most impres - sive new luxury car launched in the past 12 months, by the World Car Awards expert jury. Further, in November it was announced that in the most recent round of Euro NCAP safety testing, the Volvo EX90 SUV earned the maximum five-star rating, placing it among the highest-performing cars of 2025. Volvo Cars introduced world first multi-adaptive safety belt In June, Volvo Cars unveiled a major safety improvement to the safety belt. The new multi-adaptive safety belt is a world-first tech - nology aimed to further enhance safety for everyone in real-world traffic situations. The new multi-adaptive safety belt can use data input from interior and exterior sensors to customise protection, adapting the setting based on the situation and individual’s profiles, such as their height, weight, body shape and seating position. This will be debuting in the upcoming fully electric Volvo EX60 in 2026. In October, Volvo Cars was honoured for the second year in a row, to be included on the TIME list for its latest safety innovation, as multi-adaptive safety belt was recognised as one of the Best Inven - tions of 2025. Volvo Cars announced one-off SEK 11.4 billion non-cash impairment charge In June, Volvo Cars announced that the company is adjusting the financial assumptions for the EX90 and ES90 platform, with reasons including previous launch delays and new import tariffs in several markets. The Volvo EX90 will have a reduced lifecycle profitability, despite a major upgrade of software quality and a planned volume ramp-up. This is due to significant launch delays in the past and subsequent additional development costs. Top 10 retail sales by market (k units) 2025 2024 China 149.5 156.4 US 121.6 125.2 UK 68.7 66.4 Germany 59.8 62.0 Sweden 47.9 46.2 The Netherlands 20.0 30.7 Belgium 17.4 25.2 Poland 15.3 14.9 Türkiye 15.2 13.0 Spain 15.2 18.0 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / DIRECTORS’ REPORT  31 ===== SIDA 32 ===== Meanwhile, due to import tariffs the company is currently unable to sell the Volvo ES90 profitably in the United States, while ES90 margins are also under pressure in Europe for the same reason. In light of the above, Volvo Cars recorded a one-off non-cash impairment charge of SEK 11.4 bn. Volvo Car AB (publ.) resolved on repurchase of own shares During the second quarter 2025, Volvo Cars repurchased a total of 12,500,000 own shares of class B, repurchased for a total amount of SEK 218,866,471. Treasury shares are purchased to secure the future delivery of shares to participants in Volvo Cars’ Performance Share Plans (PSP) adopted by the Annual General Meeting in 2023, 2024 and 2025 and Employee Share Matching Plans (ESMP) adopted by the Annual General Meeting in 2024. During 2025, a total of 2,098,557 shares were distributed to participants in the ESMP share matching programmes for 2022 and 2023, and a total of 526,799 shares for the PSP programme. As at 31 December 2025, Volvo Cars held 14,894,838 own shares. Volvo Cars brings production of global best-seller XC60 to its US plant In July, Volvo Cars announced it will add its best-selling XC60 mid-size SUV to the production line of its US car plant in Charleston, South Carolina. The Charleston facility, which also assembles the fully electric flagship EX90, is scheduled to start XC60 production in late 2026. Volvo Cars completed its acquisition of NOVO Energy AB In July, Volvo Car Corporation finalised the acquisition of Northvolt AB’s shares in NOVO Energy AB and became 100% shareholder of NOVO Energy AB. This completes the acquisition process which began in October 2024 when Volvo Car Corporation notified its counterpart in the joint venture NOVO Energy AB, Northvolt AB, that Volvo Cars executed its redemption right to acquire Northvolt’s 50% shareholding in NOVO Energy AB. Reveal of the new Volvo XC70 In August, the new Volvo XC70 SUV was revealed. This is Volvo Cars’ first long-range plug-in hybrid, offering an all-electric driving range of over 200km under the CLTC testing cycle – the longest of any Volvo plug-in hybrid to date. It is designed to meet growing demand for longer-range plug-in hybrids, particularly in China. Volvo Cars continues to invest in South Carolina plant In September it was announced that Volvo Cars will continue to invest in its US car plant in Charleston, South Carolina, with the aim of reaching full utilisation of the factory in coming years. Volvo Cars has already invested USD 1.3 billion in the plant in the last decade, to make it ready for the future. Through these investments, Volvo Cars intends to deliver both volume and financial growth as well as using the plant’s capacity. The Charleston plant currently has an installed production capacity of 150,000 cars per year. Volvo Cars’ Strategy Update Day In November, Volvo Cars outlined the strategy going forward, at an event for investors in Stockholm. During the event, Volvo Cars’ management team presented how the organisation is being struc - turally built to achieve a long-term EBIT margin of over 8 per cent, strong positive cash flows and growth through electrification. Green financing 2025 In March, a drawdown of USD 438 m was made under an existing bilateral loan facility with the purpose to finance investments that meet the eligibility criteria set out in the Volvo Cars Green Financing Framework. The facility was originally signed in 2023/2024 and will mature in 2035. In June, Volvo Cars issued its fifth green bond of EUR 500 m, with a four-year tenor. The proceeds will support the ambition to be a leading player in the premium electric car segment and achieve net- zero greenhouse gas emissions by 2040. This includes funding research and development of upcoming electric cars and platforms, and related manufacturing processes. The bond, along with all our previously issued green bonds, is listed on the Luxembourg Stock Exchange. In September, a new bilateral eight-year loan agreement of EUR 150 m was signed with the purpose to finance investments that meet the eligibility criteria outlined in the Green Financing Frame - work. The loan facility remains undrawn as per the end of 2025. In October, an existing eight-year credit facility of CNY 3,090 m was terminated, and the drawn amount of CNY 259 m was repaid. In November, the first extension option on the existing sustainability -linked Revolving Credit Facilities was exercised, extending maturities by one year. The updated maturities for the Revolving Credit Facilities of EUR 500 m and EUR 1,500 m are in 2028 and 2030, respectively. Changes in Board of Directors and the Executive Management Team Changes to the Board of Directors • On 31 March, Jim Rowan left the Board. • On 3 April, Håkan Samuelsson was elected as a new member of the Board. He previously served on the Volvo Cars Board and as CEO from 2012 to 2022. He served as Chairperson of Polestar until 2024. • In June, Lone Fønss Schrøder stepped down from the Board of Directors in Volvo Cars. At the same time she was appointed Chairperson of the Board of Geely Sweden Holdings, and will represent Geely Sweden Holdings in Volvo Cars’ Nomination Committee. • At an Extraordinary General Meeting (the “EGM”) of Volvo Car AB (publ.) on 8 December 2025, the EGM resolved that the Board of Directors shall consist of ten ordinary Board members elected by the shareholders’ meeting without deputy Board members. Pieter Nota and Caroline Grégoire-Sainte-Marie were elected as new Board members until the end of the next Annual General Meeting. Changes to the Executive Management Team • In April, Håkan Samuelsson succeeded Jim Rowan as President and Chief Executive Officer. • Fredrik Hansson was appointed Chief Financial Officer (CFO), effective from 24 April. He succeeded Johan Ekdahl, who left Volvo Cars. • From 1 June, Olivia Ross-Wilson left Volvo Cars and her position as Global Head of Communication. She was succeeded by Jenny Åström, and the position was moved from the EMT to the EMT Extended (EMTe) team. • Structural changes were made to EMT during August. Erik Sever - inson was appointed Chief Commercial Officer and Michael Fleiss replaced Erik Severinson as Chief Strategy & Product Officer. In addition, Volvo Cars appointed Product Line Owners for its prod - uct lines. These are a part of the EMT Extended (EMTe) team and report to the Chief Commercial Officer. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / DIRECTORS’ REPORT  32 ===== SIDA 33 ===== Research and development Over the past year, Volvo Cars has made significant progress in research and development, centred on the introduction of SPA3, the company’s next-generation, fully electric vehicle architecture. Designed as an uncompromised battery electric vehicle (BEV) plat - form, SPA3 represents a major technological step forward, enabling scalability across the full product range, from compact to large premium electric vehicles, while meeting requirements for perfor - mance, cost efficiency, quality and sustainability. During the year, Volvo Cars has also completed a major transfor - mation toward software-defined vehicles by unifying its entire product portfolio, including new BEVs and next-generation plug-in hybrids, on a single software architecture. This “one-track” software approach enables faster development, continuous over-the-air upgrades, improved quality and long-term product competitiveness, while allowing functionality and performance to improve throughout the vehicle lifecycle. Collectively, these developments position Volvo Cars at the fore - front of electric and digital vehicle technology. SPA3 is delivered on time, on cost and on quality, and forms a foundational platform for future products such as the newly launched EX60. The past year has marked a decisive shift toward fully electric, software-centric vehi - cles designed to evolve continuously and deliver long-term value to both customers and the business. Environment Volvo Cars has a long-standing commitment to being a responsible company with a clear focus on sustainable development. Volvo Car Group’s Sustainability Statement has been prepared in accordance with the Swedish Annual Accounts Act, chapter 6, European Sustainability Reporting Standards (ESRS) and the EU Taxonomy Regulation. The scope and content of the Sustainability Statement is defined on page 133 in this report. Employees In 2025, Volvo Car Group on average employed 42.6 (42.6) thou- sand full-time employees (FTEs) and 2.3 (3.4) thousand agency personnel. The main driver behind the reduction in agency person - nel is the effect from the restructuring programme. That effect is also visible for FTEs when comparing year end figures for 2025 with 2024 by about 2.3 thousand employees. Proposed distribution of non-restricted equity The parent company The following funds are at the disposal of the Annual General Meeting (AGM): Share premium reserve SEK 31,653,517,859 Retained earnings brought forward SEK 5,083,584,404 Net income for the year SEK 4,355,103,303 At the disposal of the AGM SEK 41,092,205,566 The Board proposes the following allocation of funds: Carried forward SEK 41,092,205,566 Significant events after the reporting period On 7 January, Volvo Cars announced the appointment of Thomas Ingenlath as Chief Design Officer, effective 1 February 2026. On 21 January, the new Volvo EX60 was released, as the newest entry in our portfolio of electrified cars. On 17 February, Volvo Cars’ largest shareholder, Geely, reported an increase in its holdings in Volvo Cars by 0.22 per cent, as Geely International Hong Kong Limited purchased approximately 6.54 million shares between 6-16 February. After those transactions, Geely’s total ownership percentage in Volvo Cars is 78.87 per cent. The Nomination Committee’s proposal for election of members to the Board of Directors of Volvo Car AB (publ.) The Nomination Committee of Volvo Car AB (publ.) has decided to submit the following proposals for resolution at the Annual General Meeting of shareholders on 31 March 2026: Re-election as members of the Board of Directors: Eric Li (Li Shufu), Daniel Li (Li Donghui), Håkan Samuelsson, Jonas Samuelson, Diarmuid O’Connell, Lila Tretikov, Ruby Lu (Rong Lu) and Pieter Nota. Re-election of Eric Li (Li Shufu) as Chairperson of the Board of Directors. Anna Mossberg and Caroline Grégoire Sainte Marie have declined re-election. The Nomination Committee proposes Natalie Knight and Markus Schäfer to be elected as new members of the Board of Directors. Markus Schäfer with effect as of 1 July 2026. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / DIRECTORS’ REPORT  33 ===== SIDA 34 ===== Remuneration guidelines to senior executives The following principal guidelines for remuneration to senior execu - tives were adopted at the Annual General Meeting held on 3 April 2025. These guidelines shall be applicable to remuneration to the Executive Management Team, including the CEO, (“EMT”) of Volvo Car AB (“Volvo Cars”). The guidelines imply that the People Com - mittee, instead of Board of Directors in its entirety, is responsible for certain resolutions pursuant to these guidelines. Types of remuneration The total remuneration package for the EMT may consist of the following components; fixed remuneration, variable remuneration, pension benefits and other benefits. The components of remunera - tion shall be in accordance with local market practice. Additionally, the general meeting may – irrespective of these guidelines – resolve on, among other things, share-related or share price-related remu - neration. Please refer to Share-based or share price-related incen - tive programmes below. Variable cash remuneration The satisfaction of criteria for awarding short-term variable cash remuneration shall be measured over a period of one year, whereas the satisfaction of criteria for awarding long-term variable remuner - ation shall be measured over a period of three years. For the CEO, the short-term variable cash remuneration may not amount to more than 200 per cent of the annual fixed base salary on 31 December at the end of each performance year, and the long- term variable remuneration may not amount to more than 150 per cent of the annual fixed base salary the year the programme was implemented. For the other EMT members, the short-term variable cash remuneration may vary but not amount to more than 140 per cent of the annual fixed base salary on 31 December at the end of each performance year, and the long-term variable remuneration may vary but not amount to more than 120 per cent of the annual fixed base salary the year the programme was implemented. For information on the criteria for awarding short- and long-term varia - ble remuneration, please refer to Criteria for awarding variable remuneration below. Extraordinary arrangements Further variable remuneration may also be paid out in extraordinary circumstances, provided that such arrangement is of a one-time nature and is agreed on an individual basis for management recruit - ment or retention purposes or as compensation for extraordinary efforts beyond the individual’s ordinary assignment. Such remuner - ation shall be in line with market practice and may for example include a one-time cash payment, retention bonus or severance payment in case of a change of control, or similar. The remuneration may not amount to more than the annual fixed base salary for 1 year and shall not be paid more than once a year per individual. Resolu - tions on such compensation shall be made by the People Committee based on a proposal from the CEO if an EMT member (other than the CEO) is concerned and by the People Committee and the Chairper - son of the Board of Directors, or the Vice Chairperson as delegated, if it relates to the CEO. Share-based or share price-related incentive programmes The Board of Directors may, irrespective of these guidelines, pro - pose the general meetings to resolve on long-term share-based or share price-related incentive programmes. During the previous annual general meetings held from 2022 and onwards, the Board of Directors proposed, and the annual general meetings approved long-term share-based incentive programmes comprising, amongst others, the EMT. The Board of Directors intends to propose forth - coming annual general meetings to approve similar incentive pro - grammes. No new long-term variable cash programmes will there - fore be offered to the EMT as long as there is a long-term share-based programme in place. Criteria for awarding variable cash remuneration The variable short-term cash remuneration shall be linked to prede - termined and measurable criteria which can be financial or non-fi - nancial. The criteria for the variable short-term remuneration shall be determined yearly by the People Committee. Variable long-term remuneration, which is not approved by the annual general meeting, if any, shall be linked to the satisfaction of certain financial performance conditions determined by the People Committee and measured over the term of the programme. For both short-term and long-term variable remuneration, the crite - ria may also be individualised, quantitative or qualitative objectives. The criteria shall be designed to contribute to the company’s busi - ness strategy and long-term interests, including its sustainability. To which extent the criteria for awarding variable remuneration have been satisfied shall be evaluated when the measurement period has ended. The People Committee is responsible for the evaluation. For financial objectives, the evaluation shall be based on the latest financial information made public by the company. Pension benefits For the CEO, pension benefits shall be a defined contribution scheme, and the pension premiums may amount to not more than 50 per cent of the annual fixed base salary. Variable remuneration shall not qualify for pension benefits. For other EMT members, pension benefits shall be a defined con - tribution scheme, and the pension premiums may amount to not more than 30 per cent of the annual fixed base salary. No current EMT members have a defined benefit pension. However, defined benefit pension can be offered to future EMT members as part of a pre-existing agreement. To the extent that variable remuneration qualifies for pension benefits under the applicable collective bargaining agreement, the pension benefits shall be deducted from the payment and paid as pension. Other benefits Other benefits may include, for example, medical insurance, annual health check-up and company cars. Such benefits may amount to not more than 20 per cent of the annual fixed base salary. For employments governed by rules other than Swedish, pension benefits and other benefits may be duly adjusted for compliance with mandatory rules or established local practice, taking into account, to the extent possible, the overall purpose of these guidelines. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / DIRECTORS’ REPORT  34 ===== SIDA 35 ===== EMT members who are expatriates (i.e., are sent on an international assignment and are not on a local employment contract) may receive additional remuneration and other benefits determined in line with the company’s International Assignment Instruction which may include (but are not limited to) relocation cost, cost of living allowance, housing, schooling, home travel allowance and tax assis - tance. Such benefits may amount to no more than 160 per cent of the annual fixed base salary. Clawback The Board of Directors shall have the possibility, in accordance with applicable law or contractual provisions, to in whole or in part reclaim variable remuneration paid on incorrect grounds. Termination of employment Upon termination of an employment, the notice period may not exceed twelve (12) months. Fixed base salary during the notice period and severance pay may together not exceed an amount corresponding to the individual’s fixed base salary for two (2) years, subject to applicable law. When termination is made by the EMT member, the notice period may not exceed twelve (12) months, without any right to severance pay. Additionally, remuneration may be paid for non-compete under - takings. Such remuneration shall compensate for loss of income and shall only be paid in so far as the previously employed executive is not entitled to severance pay. The remuneration may amount to not more than 60 per cent of the monthly fixed base salary at the time of termination of employment and be paid during the time the non-compete undertaking applies, however not for more than twelve (12) months following the termination of employment. Salary and employment conditions for employees In the preparation of the Board of Directors’ proposal for these remuneration guidelines, salary and employment conditions for employees of the company have been taken into account by includ - ing information on the employees’ total income, the components of the remuneration and increase and growth rate over time, in the People Committee’s and the Board of Directors’ basis of decision when evaluating whether the guidelines and the limitations set out herein are reasonable. Share ownership guidelines for members of the EMT Since the Board of Directors believes that long-term share owner - ship is an important way to create alignment between the EMT members and Volvo Cars’ shareholders, it has implemented the following policy of share ownership for members of the EMT. As per the policy, the Board of Directors expects the CEO and other members of the EMT to accumulate personal holdings in shares with a market value corresponding to the value of 100 per cent of the EMT member’s gross annual fixed base salary. When calculating the value of the personal holdings, the market value of the shares at each investment instance shall be used. It is expected that the personal holding of shares be established within five years from the listing of the company and, for new hires, within five years from commencement of employment with the group as CEO or as a member of the EMT. The CEO and other members of the EMT shall retain shares allotted (net after taxes payable) under future incen - tive programmes to achieve the expected share ownership. Further, upon reaching the recommended share ownership level, it is expected that the CEO and the other members of the EMT maintain shares of such value for the duration of their appointment as CEO or the other member of the EMT. Remuneration guidelines governance The Board of Directors has established the People Committee, whose tasks include preparing the Board of Directors’ decision to propose guidelines for EMT remuneration. The Board of Directors shall prepare a proposal for new guidelines at least every fourth year and submit it to the general meeting. The guidelines shall be in force until new guidelines are adopted by the general meeting. The People Committee shall also monitor and evaluate variable pay programmes, the application of the guidelines for executive remuneration as well as the current remuneration structures and compensation levels in the company. The members of the People Committee are independent of the company and its executive management. Neither the CEO nor any other EMT member participate in the Board of Directors’ decision - making process on any resolutions regarding remuneration-related matters as far as that could potentially affect their own remunera - tion. Deviation from the guidelines The Board of Directors may temporarily resolve to deviate from the guidelines, in whole or in part, if in a specific case there is special cause for the deviation and a deviation is necessary to serve the company’s long-term interests, including its sustainability, or to ensure the company’s financial viability. The People Committee’s tasks shall include preparation of any resolutions to deviate from the guidelines. The Board of Directors’ proposal to guidelines for executive remuneration 2026 The Board of Directors of Volvo Car AB (“Volvo Cars”) proposes no changes to the guidelines for remuneration to the Executive Man - agement Team (including the CEO and any deputy CEO) (“EMT”) for the 2026 Annual General Meeting. The current guidelines, adopted by the Annual General Meeting held in April 2025, remain applicable for 2026. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / DIRECTORS’ REPORT  35 ===== SIDA 36 ===== Risk OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 36 VOLVO CAR GROUP ===== SIDA 37 ===== Risk is an inherent aspect of business, encompassing both potential threats and opportunities. Effective risk management not only miti - gates adverse impacts but also enables the identification of oppor - tunities and the creation of value. At Volvo Cars, the risk manage- ment process is designed to support the organisation in identifying, managing, and monitoring critical risks that may affect the achieve - ment of our financial targets and strategic objectives. The ability to recognise and adapt to evolving threats is a cornerstone of our risk management approach. Enterprise Risk Management (ERM) is integrated into the business with the objective of enhancing decision-making, proactively safe - guarding the execution of strategies and plans, and protecting cor - porate assets. Volvo Cars is committed to fostering a systematic approach to risk management, underpinned by organisational cul - ture, business insights and accountability. This approach is aligned with industry best practices. Risk Landscape The top risks identified for 2025 are closely related to Volvo Cars’ strategic priorities— Electrification, Regionalisation and Profitability. The risks related to advanced technological developments for future car models have been reduced. However, ongoing geopolitical tensions, technological decoupling and trends towards deglobalisa - tion continue to shape the risk landscape. A key strength of Volvo Cars lies in our ability to swiftly identify and respond to emerging threats, reinforcing our organisational resilience. In 2025, the automotive industry faced considerable challenges in major markets such as China, Europe, and the United States mainly driven by uncertainties in the economic development and geopolitical instability. The geopolitical situation with rising tariffs and trade barri- ers between the US, China and Europe are also affecting the supply chain with financial distressed suppliers as one of the examples. While electric vehicle (EV) growth remains strong in China, demand in Europe and the U.S. is more moderate, hindered by pricing pressures, fierce competition, reduced subsidies and infrastructure limitations. In response, Volvo Cars is recalibrating its electrification timeline and optimising the balance between battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). The company is prior - itising cost reduction and cash preservation to sustain profitability and growth. Governance The Board of Directors holds ultimate responsibility for ensuring that all risks (including those related to climate and nature) are ade - quately managed. Certain responsibilities are delegated to the Audit Committee and the People Committee. Operational risk manage - ment is overseen by the Chief Executive Officer and the Executive Management Team (EMT), with the Head of ERM reporting the top risks biannually to the Executive Management Team and the Board of Directors. Risk input is collected quarterly from across the organisation via local risk managers, resulting in a comprehensive risk overview. Each identified risk is assigned a risk owner responsible for managing the risk in accordance with Volvo Cars’ Risk Management principles. Prior to formal reporting, a dedicated ERM Core Team, consisting of senior managers across the company, conducts a thorough review and prioritisation of risks from a cross-functional perspective. Additionally, the Internal Audit function serves as the third line of defense, providing independent assurance on the effectiveness of risk management practices. Enterprise Risk Management CONTEXT Consists of the policies, strategies, plans, targets, purposes and other steering principles tha t are pointing out the direction of the business. BUSINESS PROCESSES The analysis, decision-making and execution necessary to move in the right direction. RISKS External and internal uncertain - ties, threats and weaknesses that can make us deviate from the intended direction. RISKS CONTEXT BUSINESS PROCESSES RISK MANAGEMENT (RM) Is the combined countermeasures taken to manage risks. Integrated RM means that it is primarily driven by the business where the RM roles support with tools and competence. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK ENTERPRISE RISK MANAGEMENT CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / RISK 37 ===== SIDA 38 ===== For sustainability-related risks and opportunities, Volvo Cars adheres to the requirements in the European Sustainability Report - ing Standards (ESRS) and conducts yearly materiality assessments. More information can be found on page 145. Risk Culture Risk management at Volvo Cars is influenced by COSO and ISO31000, thus understanding that all functions address the risks inherent in their daily responsibilities. This is further reinforced through training given to different target groups including risk management principles, procedures, directives and guidelines. Volvo Cars adopts a holistic approach to risk management, begin - ning with governance and taxonomy that promote collaboration and transparent decision-making. This approach is closely aligned with corporate strategy and the corresponding risk and opportunities. The company embraces calculated risks in pursuit of our strategic objectives, ensuring a balanced approach to opportunity and risk. Risk Management Practices The Risk Management function at Volvo Cars is designed to be dynamic, iterative, and responsive to change. A dynamic approach acknowledges the rapidly evolving and interconnected nature of the risk landscape. An iterative process ensures that the risk manage - ment cycle remains continuously active and embedded within the business. As our business context and model evolve, so too must our risk management practices. Our aim is to ensure that risk management is driven by business insights and accountability integrated into daily operations and aligned with best-in-class methodologies. Approach to Risk At Volvo Cars, our risk management approach is tailored to the nature of each risk category. This strategic alignment ensures that risks are addressed appropriately across the organisation. Risk Quantification The Risk Management function is responsible for developing and maintaining a standardised risk quantification model. This model enables consistent evaluation of risks using impact and likelihood parameters in line with ISO 31000, distinguishing enterprise-level risks from functional ones. Risks are assessed across six impact dimensions, with high-impact, high-likelihood risks prioritised by the Executive Management Team. The ERM Core Team consolidates and reviews reported risks before presentation to the Executive Manage - ment Team and Board of Directors. Risk Drivers and Accelerators Certain macro-level factors, though not risks in themselves, act as accelerators, influencing the pace and emergence of risks. These drivers are integral to Volvo Cars’ strategic planning. Intelligence gathering on trends supports proactive decision-making and enhances preparedness. Further insights on industry trends and strategic responses are available on pages 15–28. APPROACH TO RISK STRATEGIC Averse Cautious Minimalist Open Hungry Medium – High risk appetite because of high opportunities. High management attention. Wide range due to wide range of risk areas. Each area to do cost benefit analysis and review insurable risks. Strong process control. Wide range connected to relevant business decisions. Strong second line control. Normally include s both downside and upside. Zero to Low appetite, strong first and second line control. Company policies set the principles. Note OPERATIONAL FINANCIAL COMPLIANCE & FINANCIAL REPORTING GEOPOLITICAL DEVELOPMENTS MACROECONOMIC DEVELOPMENT THE COMPETITIVE ENVIRONMENT AND TECHNOLOGICAL DEVELOPMENT BARRIERS FOR EXECUTION RISK DRIVERS AND ACCELERATORS OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK ENTERPRISE RISK MANAGEMENT CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / RISK 38 ===== SIDA 39 ===== Key Risks for 2025 This section summarises the top prioritised risks for 2025, including descriptions, response actions, and outlooks indicating whether risks are increasing, stable, or decreasing. STRATEGIC RISKS Risk Description Response Outlook  Challenges with market shift, intense competition and consumer behaviour in electrification transfor- mation As customers move towards electric vehicles, there is uncertainty on the pace of consumer acceptance, market by market. The move from ICE vehicles to BEV is dependent on factors like range, charg - ing experience and price. In combination with geopolitical develop - ments, removal of EV incentive programs, uncertainties in regula - tory requirements on emission reduction and impacts from instable macroeconomics there is a risk of adverse effects on our growth plans both with regards to volumes and margins. In addition to this, shifting regional market demands put pressure on us as competition continuously increases. The launch of fully electric vehicles on new platforms with competitive range and improvements of the existing ICE/PHEV/BEV cars are examples of our commitment to our strategy to balance commercial demands. There is also a regional set-up to adapt car models to local differences. Continued uncertainties due to the instability in livelihood circumstances for our customers in combination with increased competition.  Geopolitical tensions and regionalisation resulting in increased taxes/duties/ tariffs and export controls Geopolitical regionalisation introduces risk of increased protection - ism as countries and regions impose trade restrictions and trade taxes/duties/tariffs/ licensing/controls on technology, which leads to technology decoupling and increased costs. With our global presence, we are naturally partly hedging the regional differences between our markets. Our ambition to build where we sell is progressing through our established global manufacturing footprint and increased local sourcing where relevant. Regionalisation is accelerating amid global deglobalisation, with no signs of near-term stabilisation.  Scarcity of secondary and low-emission resources & technology Global demand of secondary materials and low-emission resources and technology is outpacing supply. The effect on availability and prices may affect Volvo Cars’ ability to source strategic inputs needed to achieve its environmental goals, comply with evolving regulations, and maintain cost competitiveness in a dynamic market landscape. Volvo Cars is deepening its strategic collaborations with suppliers and partners, investing in innovation and circularity, and developing flexible sourcing strategies to enhance access to key resources and technologies that deliver financial value while supporting its long-term sustainability ambitions. While the external environment remains uncertain and resource constraints are expected to persist, Volvo Cars is com- mitted to deepening its resilience and adaptability. Risk Categories Volvo Cars classifies risks into four primary categories: • Strategic – Risks that might impact reaching strategic objectives • Operational – Risks that might interfere with operations • Compliance – Risks that might impact our compliance with laws and regulations. • Financial – Risks that might impact the financial result and/or valuation OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK ENTERPRISE RISK MANAGEMENT CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / RISK 39 ===== SIDA 40 ===== OPERATIONAL RISKS Risk Description Response Outlook  Cyber risk The importance of cybersecurity is increasing in order to ensure a resilient business. Cybercriminals are well organised and pose a multitude of threats to organisations, for instance ransomware, information theft, fraud and more. Both the cybersecurity industry and regulators are addressing these threats with a mix of regulations, standards, services, and tools to mitigate the threat and impact. Volvo Cars has a global and diverse digital footprint, and cyber - security is essential in protecting all digital assets and critical business processes. Volvo Cars Cybersecurity organisation has a global footprint and is equipped to manage cybersecurity risk company wide. A governance model is in place with policies, standards, advisory, security practices implementation and incident services. An overar - ching Cybersecurity program addresses improvement areas across company functions globally. Reporting is provided regularly to the Executive Management and the Board of Directors. The cyber risk continues to increase in general and poses a risk to Volvo Cars.  Geopolitical Disruption Risk in Battery Supply and Technology Platforms Volvo Cars is exposed to heightened risks from global geopolitical tensions, particularly regarding advanced battery supply and unified technology platforms. Reliance on batteries and digital components sourced from specific regions, especially China, increases vulnerability to trade restrictions, regulatory changes, and supply chain disruptions. These factors, combined with the push for a unified tech stack, may impact operational flexibility, innovation, and brand reputation. The company is proactively strengthening quality controls, diversifying supply chains, and adapting its business model to regional needs, while maintaining a clear focus on brand integrity, responsible business practices and customer trust. While the external environment remains uncertain, Volvo Cars is committed to a clear strategy and continuous improvement to support sustainable growth and protect its reputation.  Business interruption Volvo Cars may experience disruption to manufacturing, design and research and development capabilities for a variety of reasons, such as natural disasters, environmental degradation, acts of war, epidemics and other external events. Business interruption is to a certain extent an insurable risk although the impact may go beyond direct financial impact. Mitigation actions and investments are done to increase resilience. Due to the Russia-Ukraine war, instability in the Middle East, the geopolitical climate and increased frequency/ impact natural disasters posed by accelerated environ - mental degradation, the risk remains high. COMPLIANCE RISKS Risk Description Response Outlook  Compliance with global regulatory requirements Ensuring compliance with regulatory requirements is critical to avoid fines, legal actions, and reputational damage. Several of the compliance risks faced by Volvo Cars are driven by geopolitical developments. Operating in markets with varying regulatory standards increases complexity and cost while maintaining compliance across all jurisdictions. Volvo Cars must continuously adapt its products, services, business processes and policies to remain compliant. This requires ongoing monitoring and a proactive approach to regulatory changes, which can be resource intensive. Ensuring that our teams are well- informed and trained on regulatory requirements across all areas of the business is essential to mitigate this risk. The complexity of the global regulatory landscape is increasing, driven by geopolitical developments.  Non-compliant Cross-Border Data Transfers Cross-border data transfers expose Volvo Cars to risks arising from national and regional data protection restrictions and data localisation requirements. The risks pertain to non-compliant movement of, or access to, personal or sensitive data across juris - dictions. The regulatory requirements continue to emerge and differ between countries (e.g. GDPR (EU), PIPL (China), Data Security Program (US), and DPDP (India)).1) Ongoing monitoring of regulatory developments and implementa - tion of relevant compliance activities to prevent unauthorized cross-border data transfers e.g., adoption of steering documents, awareness trainings and adding controls in data and engineering frameworks. The risk is increasing, driven by heightened geopolitical tensions and accelerating regulatory development. In addition to privacy regulations, many countries are tight - ening controls over foreign access to domestic data for national security reasons. 1) GDPR = General Data Protection Regulation, PIPL = Personal Information Protection Law, DPDP act = Digital Personal Data Protection act. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK ENTERPRISE RISK MANAGEMENT CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / RISK 40 ===== SIDA 41 ===== FINANCIAL RISKS Risk Description Response Outlook  Macroeconomic development Risk for negative effect on business due to deteriorating macro - economics, unstable geopolitical landscape, regional protection - ism and potential recession with lower purchasing power among consumers. Also, risk that our supply chain will be affected in a potential market decline. Dependent on how the macro environment develops, Volvo Cars can adjust the timing or reduce the size of investments to protect the cash flow. A close co-operation with our supply chain also supports the mitigation of these risks. Global growth to be moderate but stable around 3.0 per cent as trade policy uncertainty has diminished. Fiscal and monetary policy to provide support in 2026. Recovery in euro area but with structural headwinds. Fragmented US economy with technology-driven growth. Chinese growth expected to decline. Additional Risk Management Areas While the ERM section focuses on top group-level risks, extensive risk management activities occur daily across the organisation. Key areas include: • Financial Risks – Managed in areas such as hedge accounting, currency exposure, funding, interest rates, commodity pricing, and credit. Detailed disclosures are provided in Note 19. • Environmental risk – Climate and nature-related risks are identi - fied using scenario analyses and materiality assessments, follow - ing ESRS requirements, and integrated into strategy and risk management processes. Further details can be found in the Sustainability Statement, starting on page 130. • Responsible Business Risks – Emphasising social responsibility and business conduct, this area includes initiatives to promote inclusion and ensure ethical practices. Further details can be found in the social and governance section of the Sustainability Statement, starting on page 179. COMPLIANCE RISKS, continued. Risk Description Response Outlook  Potential human rights violations in our full value chain Volvo Cars has a global and complex value chain including opera - tions in and sourcing from high-risk countries. This means that it is important to safeguard fundamental human rights and minimise the risk that human rights violations occur at any instance of our total value chain. Failure to do so could lead to legal, financial, and reputational consequences, as well as supply chain disruptions. A human rights compliance program, built on international guide - lines, has been established to guide operations – e.g. requiring key due diligence activities across our value chain to identify and reme - diate potential issues. The public’s expectations and awareness are increasing. Current and new national and regional legislations are increasing in scope and enforcement and put more responsibility on global companies’ due diligence efforts. Upcoming EU Corporate Sustainability Due Diligence legislation will help standardise expectations according to international guidelines and will require more detailed documentation, governance oversight, and remediation processes. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK ENTERPRISE RISK MANAGEMENT CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / RISK 41 ===== SIDA 42 ===== Corporate governance OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 42 VOLVO CAR GROUP ===== SIDA 43 ===== VOLVO CAR AB (PUBL.) BOARD OF DIRECTORS Corporate governance within Volvo Car Group The purpose of Volvo Car Group’s corporate governance is to create a strong foundation for active and responsible ownership, a proper distribution of responsibilities between the different company bod - ies, as well as proper communication with all of the Group’s stake - holders with the purpose of driving sustainable growth and good governance. The corporate governance principles adhered to by Volvo Car Group are based on Swedish law, mainly the Swedish Companies Act (Sw. Aktiebolagslagen (2005:551) and the Swedish Annual Accounts Act (Sw. Årsredovisningslagen (1995:1554)), the Swedish Code of Corporate Governance (the “Code”) and Nasdaq Stockholm’s rule - book for issuers as well as other relevant laws and regulations. The Code is based on the “comply or explain” principle, meaning that companies are not obliged to at all times apply every rule in the Code, but are allowed the freedom to choose alternative solutions which are better suited for their particular circumstances, provided they report every deviation, describe the alternative solution and explain the reasons for the deviation. Volvo Car Group applies the principles of sound corporate govern - ance and responsible business practice, and the Code without any deviations. The Board of Directors of the Company (the “Board”) is responsi - ble for Volvo Car Group’s organisation and the management of its business worldwide and is obliged to follow directives provided by the General Meetings. The Board may appoint committees with specific areas of responsibility and furthermore authorise such com - mittees to decide on specific matters in accordance with regulations established by the Board. The Board has decided to delegate certain tasks related to sustainability reporting to the Audit Committee. The responsibility for sustainability matters in general, including but not limited to the strategic aspects thereof, stays with the Board. As of 20 September 2023, the Board decided to incorporate a new temporary China Committee with the purpose to prepare, and review matters on behalf of the Board regarding the strategic direction and develop - Corporate Governance Report BOARD OF DIRECTORS COMMITTEES EMT/EMTe FORA SUPPORTING GOVERNANCE FORUM SUPPORTING GOVERNANCE FUNCTIONS COMPLIANCE COMMITTEESGLOBAL AUDIT OFFICE (GAO) (Reports to Audit Committee) ENTERPRISE RISK MANAGEMENT COMPLIANCE AND ETHICS OFFICE DISCLOSURE COMMITTEEINTERNAL CONTROL PRODUCT BOARD SHAREHOLDERS THROUGH SHAREHOLDERS’ MEETINGS PEOPLE COMMITTEE DIGITAL BOARD EXTERNAL AUDITOR EXTENDED EXECUTIVE MANAGEMENT TEAM (EMTe) AUDIT COMMITTEE  CORPORATE BOARD NOMINATION COMMITTEE CEO AND EXECUTIVE MANAGEMENT TEAM (EMT) OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE CORPORATE GOVERNANCE REPORT BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM EXTENDED EXECUTIVE MANAGEMENT TEAM AUDITOR’S REPORT FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / CORPORATE GOVERNANCE 43 ===== SIDA 44 ===== ment of Volvo Cars’ business in China. In September 2025, the Board decided to discontinue the China Committee since the Board con - cluded that it has fulfilled its purpose due to the new regionalisation strategy and the new governance structure for China (see under “Regionalisation” on page 50. Following this decision, the Board’s committees consist of the Audit Committee and the People Committee. The Chairperson of the Board directs the work of the Board and monitors the Board’s fulfilment of its obligations. Until June 2025, a Vice Chairperson was also appointed to support the Chairperson as appropriate. The existing Vice Chairperson stepped down from her position in June 2025 whereafter no new Vice Chairperson has been appointed. The Board has adopted and regularly updates its rules of procedures, which outline the principles on governance of the Board and its committees. The President of Volvo Car Group, who also serves as the Chief Executive Officer (CEO), is appointed by the Board to manage the Group’s daily operations and lead the Executive Management Team (EMT) under the Board’s supervision. A broader Extended Executive Management Team (EMTe) has also been established, consisting of EMT and other key roles. Shareholders and General Meetings Shareholders exercise their influence at the General Meetings, the Company’s highest decision-making body. The Annual General Meeting is held within six months after the end of the financial year. Decisions made by shareholders’ at the General Meetings include (i) adoption of instructions for the Nomination Committee which nomi - nates members to the Company’s Board of Directors, (ii) determina - tion of the number of Board members, composition of the Board (including the Chairperson of the Board) and remuneration of Board members, based on recommendations by the Nomination Commit - tee, (iii) election of external auditors, (iv) determination of the distri - bution of dividends, (v) confirmation of income statements and bal - ance sheets and the disposition of the Company’s profit or loss, (vi) discharge from liability of the Board of Directors and CEO; and (vii) adoption of guidelines for remuneration to the CEO and other mem - bers of the EMT. In addition, the shareholders of the Company can resolve on other significant matters at the General Meeting, such as amendments to the Articles of Association. In addition to the Annual General Meeting, Extraordinary General Meetings can be convened when required. Notice of the Annual General Meeting, as well as an Extraordinary General Meeting at which the matter of amendment to the Articles of Association is to be addressed, shall be issued not earlier than six weeks and not later than four weeks prior to the General Meeting. Notices of other Extraordinary General Meetings shall be issued not earlier than six weeks and not later than three weeks prior to the Extraordinary General Meeting. Notice of General Meetings shall be published in the Swedish Official Gazette (Sw. Post- och Inrikes Tidningar) and on the Company’s website. Simultaneously, an announcement with information that the notice has been issued shall be published in Dagens Industri. Right to attend General Meetings All shareholders who are directly recorded in the Company’s share register maintained by Euroclear Sweden six banking days prior to the General Meeting and who have notified the Company of their intention to participate in the General Meeting no later than the date indicated in the notice of the General Meeting, are entitled to attend the General Meeting and vote for the number of shares they hold. In addition to notifying the Company, shareholders whose shares are nominee registered through a bank or other nominee must request that their shares are temporarily registered in their own names in the register of shareholders maintained by Euroclear Sweden, in order to be entitled to participate in the General Meeting. Shareholders should inform their nominees well in advance of the record date. Voting registrations made by nominees not later than four banking days prior to the General Meeting will be taken into account. Shareholders may attend the Company’s General Meetings in person or by proxy and may be accompanied by a maximum of two assistants. It will normally be possible for shareholders to register for the General Meeting in several different ways, as indicated in the notice of the meeting. Shareholder initiatives Any shareholder of the Company who wishes to have a matter addressed at a General Meeting must submit a written request to the Board of Directors. The matter will be addressed at a General Meeting if the request has been received by the Company no later than seven weeks prior to the General Meeting, or after such date, if it still is in due time for the matter to be included in the notice of the General Meeting. Number of shareholders and ownership structure The total number of shares in Volvo Car AB (publ.) amounts to 2,979,524,179 shares of series B which are listed on the Nasdaq Stockholm Stock Exchange. Per 16 February 2026, Volvo Cars larg- est shareholder is Geely Sweden Holdings AB holding approximately 78.65 per cent of the total number of shares and votes in the Com - pany. In addition, per the same date, Geely International Hong Kong Limited holds approximately 0.22 per cent of the total number of shares and votes in the Company. The remaining 21.13 per cent of the shares and votes are held by Nordic and international investors and approximately 153,000 other investors. For further information on the ownership structure, please refer to page 220. Volvo Cars held 14,894,838 own shares as per 31 December 2025. Nomination Committee Under the Code, a company listed on Nasdaq Stockholm shall have a Nomination Committee, the purpose of which is to make proposals to the General Meeting in respect of the Chairperson of General Meet - ings, number of Board members, elections of Board members, Chair - person of the Board and auditor, remuneration of each Board mem - ber (divided between the Chairperson of the Board and other Board members, and remuneration for committee work), remuneration to the auditor, and to the extent deemed necessary, proposals for amendments to the instruction for the Nomination Committee. At the Annual General Meeting held on 17 October 2021, the cur - rent instruction for the Nomination Committee was adopted to apply until further notice. The Nomination Committee prior to the Annual General Meeting 2026 consists of representatives of the three largest shareholders in terms of voting rights, as of 29 August 2025, and as announced on 10 September 2025. Members of the Nomination Committee are: • Lone Fønss Schrøder, appointed by Geely Sweden Holdings AB, Chairperson of the Nomination Committee • Per Ansgar, appointed by Geely Sweden Holdings AB • Eric Li (Li Shufu), Chairperson of the Board of Volvo Car AB (publ.) • Anders Oscarsson, appointed by AMF • Emilie Westholm, appointed by Folksam The Nomination Committee applies a framework for nomination of members to the Board, which stipulates that the composition of the Board shall be diverse in terms of gender, nationality, professional background and key competences e.g. sustainability, relevant trans - formation areas and new technology. This is to ensure that the Board OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE CORPORATE GOVERNANCE REPORT BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM EXTENDED EXECUTIVE MANAGEMENT TEAM AUDITOR’S REPORT FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / CORPORATE GOVERNANCE 44 ===== SIDA 45 ===== has the appropriate balance of expert knowledge, which matches the scale and complexity of Volvo Cars, supports sustainable develop - ment and meets the independency requirements of Volvo Cars. Volvo Cars’ aim is to have a balanced composition in terms of gender and it is the ambition that each gender shall have a share of at least some 40 per cent of the Board members elected by the shareholders’ meeting. This ambition was achieved in the Annual General Meetings 2023, 2024 and 2025, whereafter the two latter years 44 per cent of the Board members elected by the shareholders were women. Fol - lowing Lone Fønss Schrøder’s decision to step down from the Board in June 2025, 37.5 per cent of the Board members elected by the shareholders were women. Following the Extraordinary General Meeting held on 8 December 2025, 40 per cent of the Board members elected by the shareholders are women. The Unions repre - sented in the Board shall be encouraged to apply the corresponding ambition when appointing their representatives. Board of Directors The Board of Directors, which is the highest decision-making body after the General Meeting, bears ultimate responsibility for Volvo Car Group’s organisation, management and control of Volvo Car Group’s financial conditions. The Board of Directors shall further ensure that the Company applies the Code and complies with applicable laws and regulations, Nasdaq Stockholm’s rulebook for issuers, the listing rules of the Luxembourg Stock Exchange’s Euro MTF market, the Company’s Articles of Association and the rules of procedures for the Board. Composition At all times, the Board shall consist of a minimum of three and a max - imum of twelve members and in addition thereto the number of employee representatives as required under Swedish law. No mem - ber of the EMT other than the CEO shall be a member of the Board. Each new Board member is provided with an introduction programme to learn about Volvo Car Group and its regulatory requirements. It is furthermore the Board’s intention, during normal conditions, to visit a Volvo Car Group site other than the headquarters at least once a year. In accordance with the Code, the rules of procedures for the Board stipulate that the majority of the Board members elected by the General Meeting shall be independent of the Company and the EMT and at least two of these independent members shall also be inde - pendent of major shareholders. In order to determine whether a member of the Board is independent in relation to the Company and the EMT, an overall assessment must be made of all circumstances which might give reason to question the independence of the Board member, e.g. the Board member’s current or previous employment, other board memberships or other relationships. Furthermore, in order to determine the independence in relation to major sharehold - ers, consideration must be given to the scope of the Board member’s direct or indirect relationship to the Company’s major shareholders. Pursuant to the Code, “major shareholder” means a shareholder who, directly or indirectly, controls 10 per cent or more of the shares or voting rights in the Company. The Nomination Committee’s assess - ment of the independence of the Board members in relation to the Company, the EMT and major shareholders is presented below. Daniel Li (Li Donghui), Anna Mossberg, Jonas Samuelson, Lila Tretikov, Diarmuid O’Connell, Ruby Lu (Rong Lu), Pieter Nota and Caroline Grégoire Sainte Marie are deemed independent in relation to the Company and the EMT, and, among these members, Anna Mossberg, Jonas Samuelson, Lila Tretikov, Diarmuid O’Connell, Ruby Lu (Rong Lu), Pieter Nota and Caroline Grégoire Sainte Marie are also deemed independent in relation to major shareholders. The Company thereby satisfies the Code’s independence requirement. Name of the Board members Independent of the company/senior management Independent of the company’s major shareholders Board meeting attendance Committee meeting attendance Remuneration, Board and Committees 1), SEK Members elected by the Shareholders’ Meeting Eric Li (Li Shufu) (Chairperson of the Board) N N 12/15 N/A N/A Lone Fønss Schrøder (Vice Chairperson of the Board) 2) Y N3) 9/9 6/6 3,310,000 Jim Rowan4) N Y 4/5 2/2 N/A Håkan Samuelsson 5) N Y 10/10 1/1 N/A Daniel Li (Li Donghui) Y N 14/15 10/13 N/A Jonas Samuelson Y Y 15/15 10/10 1,855,0006) Diarmuid O’Connell Y Y 15/15 6/7 1,345,000 Lila Tretikov Y Y 15/15 9/10 1,420,000 Anna Mossberg Y Y 13/15 N/A 1,200,000 Ruby Lu (Rong Lu) Y Y 12/15 2/3 1,420,0007) Pieter Nota8) Y Y 1/1 N/A 1,200,000 Caroline Grégoire Sainte Marie 8) Y Y 1/1 N/A 1,420,0009) 1) Annual average remuneration of the Board and Committees as adopted by the Annual General Meeting in April 2025. 2) Lone Fønss Schrøder left the Board on 26 June 2025. Remuneration includes annual average remuneration as vice chairperson of the Board and chair - person of the Audit Committee. 3) Since 2019, Lone Fønss Schrøder was a director in the board of Geely Sweden Holdings AB, the main owner of Volvo Cars. 4) Jim Rowan left the Board on 31 March 2025. 5) Håkan Samuelsson joined the Board at the Annual General Meeting on 3 April 2025. 6) Jonas Samuelson was appointed as chairperson of the Audit Committee on 16 July 2025, remuneration therefore includes annual average remuneration as chairperson of the Audit Committee. 7) Ruby Lu was a member of the China Committee until it was dissolved in September 2025, remuneration therefore includes annual average remuneration for membership in the China Committee. 8) Appointed at the Extraordinary General Meeting held on 8 December 2025. 9) Caroline Grégoire Sainte Marie was appointed as member of the Audit Committee on 9 December 2025, remuneration therefore includes annual average remuneration for membership in the Audit Committee. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE CORPORATE GOVERNANCE REPORT BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM EXTENDED EXECUTIVE MANAGEMENT TEAM AUDITOR’S REPORT FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / CORPORATE GOVERNANCE 45 ===== SIDA 46 ===== Conflicts of interest Board members shall inform the Chairperson and/or the Vice Chair - person (if appointed) immediately if they find themselves in a con - flict-of-interest situation. A Board member with a conflict of interest in relation to any matter to be dealt with by the Board may not par - ticipate in the discussions (unless there are specific circumstances) or decisions regarding such matter. As an example, Eric Li (Li Shufu) and Daniel Li (Li Donghui), are not involved in any decision regarding Geely Holding Group entities and Lone Fønss Schrøder was not involved in any such decisions during her time as Board member. In addition, as an additional governance measure in relation to conflicts of interest, all related party transactions are handled by a specific department within Volvo Car Group, called Collaborations. Matters for the Board The Board is responsible for the organisation of Volvo Car Group and the management of its business worldwide. The Board continuously monitors Volvo Car Group’s performance, evaluates Volvo Car Group’s strategic direction and business plan as well as other aspects such as adherence to its Code of Conduct. Certain matters are delegated to the Board’s Committees or the CEO as set out in the rules of procedures for the Board. Sustainability is a deeply integrated part of Volvo Car Group’s strategy and the Board monitors Volvo Car Group’s efforts in reach- ing the ambitions set, and sustainability related risks and opportuni - ties. Further information regarding Volvo Cars’ governance of sustainability related matters is described in the Sustainability Statement on page 140. To ensure that the Board has good visibility of the Group’s opera - tions, the President and CEO of the Volvo Car Group submits a report on the business, including reporting from the Group’s strategic affili - ates, where appropriate, at all Board meetings. The Chief Financial Officer also reports on the financials of Volvo Car Group, including relevant matters relating to e.g. treasury and hedging. The Board is also provided with updates and reports on other relevant topics such as risk management, disclosure matters etc., as appropriate. In addi - tion, the Board discusses specific strategic topics of relevance, and the Board Committees report on their work. At each Board meeting, a number of decision items are also presented for the Board’s consideration and decision in accordance with the Board’s rules of procedure. The work of the Board follows an annual cycle to allow the Board to address matters within the scope of its responsibility on a yearly basis. Matters that come up regularly include product and commer - cial strategy and business opportunities within new technology and digitalisation as well as sustainability and compliance. Authorisation for the Board to resolve on new issues of shares At the Annual General Meeting held on 3 April 2025, the sharehold - ers resolved to authorise the Board to, on one or several occasions, up to the next Annual General Meeting, with or without deviation from the shareholders’ preferential right, resolve on new issues of shares of series B and/or subscription warrants and/or convertible bonds. The total number of shares that may be issued by way of a new share issue, exercise of subscription warrants or conversion of convertible bonds, by virtue of the authorisation shall be within the limits of the articles of association and not exceed ten per cent of the total number of shares in the Company at the time of the Board’s resolution. The authorisation includes a right to resolve on new issues for cash consideration, by contribution in kind or payment by set-off. The issue price shall, in case of deviation from the sharehold - ers’ preferential right, be determined in accordance with market price. The Board shall be entitled to determine other terms of the issue. The purpose of the authorisation, and the reason for any deviation from the shareholders’ preferential right, is to increase the financial flexibility of the Company to enable the Company to finance the operations in a fast and efficient way, acquire companies, businesses or parts thereof and/ or to enable a broadening of the ownership of the Company. Authorisation for the Board to resolve on acquisition of own shares At the Annual General Meeting held on 3 April 2025, the sharehold - ers resolved to authorise the Board to resolve on acquisition of own shares of series B on Nasdaq Stockholm to secure Volvo Cars’ obli- gations to deliver shares to the participants in the Company’s employee share incentive plans; the Employee Share Matching Plan adopted by the Annual General Meeting during 2024 and the Perfor - mance Share Plans adopted by the Annual General Meetings during 2023, 2024 and 2025 (the “PSP” and “ESMP” respectively or jointly the “Plans”). Acquisition of own shares of series B may only be effected on Nasdaq Stockholm. A maximum of 53,441,495 shares of series B in Volvo Cars may be acquired to secure delivery of shares to the participants under the Plans, of which 9,886,909 shares relate to PSP 2023, 12,539,648 shares relate to PSP 2024, 16,578,427 relate to ESMP 2024 and 14,436,511 relate to PSP 2025. Acquisitions of shares of series B in Volvo Cars on Nasdaq Stockholm may only be made at a price within the price range (spread) on Nasdaq Stockholm applicable from time to time, meaning the spread between the high - est purchase price and the lowest selling price prevailing and dis - seminated by Nasdaq Stockholm from time to time. The authorisa - tion may be utilised on one or several occasions, however, only until the Annual General Meeting 2026. On 19 May 2025, the Board resolved to repurchase own shares in accordance with the authorisation to secure the future delivery of shares to participants in the PSP adopted by the Annual General Meeting in 2023, 2024 and 2024 and the ESMP plan adopted by the Annual General Meeting in 2024. Pursuant to the repurchase pro - gramme, 12,500,000 shares of series B were repurchased during the period between 20 May and 19 June 2025, for a total amount of SEK 218,866,471. All acquisitions were made on Nasdaq Stockholm by Skandinaviska Enskilda Banken AB (publ) on behalf of the Company. Board meetings In accordance with the rules of procedures for the Board, the Board is expected to meet six to ten times per year at venues to be agreed by the Board. The Board has held 15 meetings during 2025, of which ten were ordinary and five extraordinary. The Board meets the exter - nal auditor at least once a year without the CEO or any other member of the EMT present. In addition, the Board occasionally holds non-executive meetings. The General Counsel and Chief Corporate Affairs Officer is the secretary of the Board and also attends Board meetings as does the Chief Financial Officer. The table on page 45 shows the Board members’ attendance to the Board meetings in addition to their independence according to the requirements of the Code in relation to (i) the Company and (ii) the major shareholder, and the remuneration to the Board members for Board and Committee work. Evaluation of the work of the Board The Board, through an external provider, conducts an annual survey of its work performed during the year. The survey covers areas such as the climate at Board meetings, the allocation of time spent on different topics, the work of the Board and its committees, the effi - ciency of the work of the Board, their prerequisites to perform Board work, Board leadership and relations with the EMT. Based on the result of the survey the Board will be benchmarked against its peers. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE CORPORATE GOVERNANCE REPORT BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM EXTENDED EXECUTIVE MANAGEMENT TEAM AUDITOR’S REPORT FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / CORPORATE GOVERNANCE 46 ===== SIDA 47 ===== The Board is also evaluated on performance and composition and possible areas of improvement are identified. Relevant parts of the survey are also used in the Nomination Committee process. In addi - tion to the annual survey, the Nomination Committee also conducts meetings with each individual Board member during the year to dis - cuss the Board work as part of the Nomination Committee process. Board committees According to the Swedish Companies Act and the Code, the Board of Directors shall institute an Audit Committee and a Remuneration Committee. The members of the Remuneration Committee are to be independent of the Company and the EMT. A majority of the Audit Committee’s members are to be independent in relation to the Company and its EMT and at least one of the members who is inde - pendent in relation to the Company and the EMT is also to be inde - pendent in relation to the Company’s major shareholders. At least one member of the Audit Committee must also have accounting or auditing proficiency. The Board has established two permanent committees, the Audit Committee and the People Committee (which fulfils the tasks of the Remuneration Committee pursuant to the Code). In addition to these, the Board established a temporary China Committee during 2023. In September 2025, the Board decided to discontinue the China Committee. The major tasks of these committees are of preparatory and advisory nature, but the Board of Directors may also delegate deci - sion-making powers on specific issues to the committees. The issues considered at committee meetings shall be recorded in minutes of the meetings and continuously reported to the Board. The commit - tees are appointed at the statutory Board meeting following election of Board members. The Board has also determined that issues may be referred to ad hoc committees dealing with specific matters. Audit Committee The Board has assigned an Audit Committee to oversee corporate governance, financial and sustainability reporting, the internal control system, risk management and compliance with external and internal regulations. The Audit Committee is responsible for identifying and reporting relevant issues to the Board within the Audit Committee’s areas of responsibility. The Audit Committees tasks are to monitor the integ - rity of Volvo Car Group’s financial and sustainability reporting sys - tem, internal controls, related-party transactions, operation proce - dure and the enterprise risk management framework, recommend to the Board the appointment, removal and remuneration of the exter - nal auditors (subject to approval at the shareholders’ meeting) in accordance with the Swedish Companies Act, monitor the independ - ence of the external auditors and review the effectiveness of the Internal Audit and the Compliance and Ethics Program. The external auditors participate in parts of the Audit Committee meetings. The Audit Committee has during the year met with the external auditors, without management present, to discuss management matters and related topics. The Internal Audit function reports directly to the Audit Committee and the Compliance and Ethics Office has direct access to the Audit Committee for escalation. The Audit Committee has held ten meetings during 2025, of which six were review meet - ings of quarterly reports or annual report meetings. Jonas Samuel - son (chairperson), Daniel Li (Li Donghui) and Lila Tretikov are the current members of the Audit Committee. Lone Fønss Schrøder was a member and chairperson of the Audit Committee until she left the Board in June 2025 . The Audit Committee complies with the Swedish Companies Act’s and the Code’s requirements for inde - pendence as well as accounting and audit competence. People Committee The Board has assigned to the People Committee to prepare the remuneration guidelines for the CEO and the EMT members. Further - more, the committee supports the Chairperson or Vice Chairperson of the Board (when appointed), as applicable, with the approval of remuneration and benefits of the CEO and is responsible for prepar - ing the remuneration report to be presented at the Annual General Meeting for its approval, and in dialogue with the CEO, assist with or resolve on various other people and remuneration matters in relation to the EMT. The committee is also responsible for approval and mon - itoring of the global incentive arrangements for the EMT and other key employees and necessary coordination of such incentives and the Volvo bonus to all employees, succession planning for the CEO in dialogue with the Chairperson or the Vice Chairperson of the Board (when appointed), as applicable, as well as other EMT positions. The committee also approves the EMT members’ engagements outside Volvo Car Group. The People Committee has held seven meetings, whereof five ordinary meetings and two extra meetings during 2025. Jonas Samuelson (Chairperson) and Diarmuid O’Connell are the current members of the People Committee. The People Committee complies with the Code’s requirements for independence. China Committee In September 2023, the Board decided to incorporate a new tempo - rary China Committee which was to be evaluated after one year. In December 2024, the Board decided to prolong the term of the committee with one additional year and in September 2025 the Board decided to discontinue the China Committee. The China Com - mittee has, until September 2025, prepared and reviewed matters on behalf of the Board regarding the strategic direction and develop - ment of Volvo Cars’ business in China. The China Committee held three ordinary meetings during 2025. Ruby Lu and Daniel Li (Li Don - ghui) were members of the Committee during the year together with Jim Rowan (Chairperson) until 31 March 2025 and Håkan Samuels - son (Chairperson) from 3 April 2025. Governance and compliance functions and forum In order to ensure a safe and stable governance of its work, the Board has three functions that directly reports, or provides regular updates to the Board or its committees: the Global Audit Office, the Compli - ance and Ethics Office and Internal Control. The Disclosure Commit - tee is a governance compliance forum that also reports to the Board. In addition, the external auditors are working independently from the Board’s functions. In addition to the above-mentioned govern - ance and compliance functions and forums, the EMT has also estab - lished three decision foras, consisting of members of the EMT and other senior company representatives: the Corporate Board, the Product Board and the Digital Board. Information on the purpose of these boards are set out under “CEO and Executive Management Team” on page 50 below. Global Audit Office Volvo Car Group has an independent Internal Audit function referred to as the Global Audit Office with the assignment to determine whether Volvo Car Group’s governance, internal control and risk management processes, as designed, operated and represented by management, are adequate and effective. The scope of the internal audit is determined by means of a risk assessment process and any additional requirements by the Board. The Audit Committee approves the internal audit plan which includes risks associated with the execution of the corporate strategy, execution of transformation, sustainability, business operations and processes. Audit results and status of implemented corrective measures by management are reported to the Audit Committee and internal audit results of OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE CORPORATE GOVERNANCE REPORT BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM EXTENDED EXECUTIVE MANAGEMENT TEAM AUDITOR’S REPORT FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / CORPORATE GOVERNANCE 47 ===== SIDA 48 ===== significance will also be reported to the Board. The Head of the Global Audit Office reports to the Audit Committee. Disclosure Committee Volvo Car Group has listed shares on Nasdaq Stockholm and listed bonds on Luxembourg Stock Exchange and is therefore required to comply with the relevant disclosure obligations under the Market Abuse Regulation (MAR), as well as under the listing rules of the Luxembourg Stock Exchange’s Euro MTF market and the Nasdaq rulebook for issuers. In order to ensure compliance with the relevant requirements, Volvo Car Group has established a Disclosure Com - mittee and the Board of Directors has adopted a set of procedures for the Disclosure Committee. The Board and the Audit Committee are kept updated on the discussions and decisions of the Disclosure Committee by means of summary reports and access to the minutes kept at the committee meetings. The members of the Disclosure Committee are the General Counsel and Chief Corporate Affairs Officer (Chairperson), the Chief Financial Officer, the Head of Treas - ury and Strategic Finance and the Head of Communications. In addi - tion, the Head of Corporate Governance participates in the meetings as secretary and the Head of Corporate Governance Office may par - ticipate as deputy secretary. The Head of Accounting and Group Reporting is a required participant in financial result review meet - ings, and other senior company representatives attend the meetings on an agenda-driven basis. The Disclosure Committee has been established to implement required disclosure controls and proce - dures, resolve whether or not information is to be categorised as inside information or not and consider whether there is reason to delay disclosure of inside information or whether disclosure as soon as possible is required as well as determine whether the require - ments for selective disclosure are fulfilled. Compliance and Ethics Volvo Cars has a Compliance & Ethics Office to support Volvo Cars in conducting its business responsibly, ethically and in accordance with all relevant laws and regulations and Volvo Cars Code of Conduct. To define the overarching role, authority, independence and oversight of the Compliance & Ethics Office and to support the Board of Direc - tors’ responsibility in overseeing the Compliance & Ethics Program, the Board of Directors has implemented a Compliance & Ethics Charter (the “Charter”) and, to support Volvo Cars’ regionalisation efforts (see further information on page 50 below), a supplementary China Compliance & Ethics Charter (the “China Charter” and jointly, the “Charters”). The Compliance & Ethics Office is led by the Global Head of Compliance & Ethics, who serves as the Chief Compliance & Ethics Officer for Volvo Car Group. The Global Head of Compliance & Ethics reports to the General Counsel and Chief Corporate Affairs Officer and, to ensure independence, also has direct access to, and regularly reports, to the Audit Committee. The Global Head of Compliance & Ethics also ensures that compliance training is provided to the Board of Directors. The Compliance & Ethics Program covers the designated compli - ance risk areas for Volvo Cars, which currently are (i) anti-corruption and bribery (incl. conflicts of interest), (ii) trade sanctions and export control, (iii) data protection (including privacy and AI compliance governance), (iv) human rights, and (v) competition law. Product compliance matters lie outside the scope of the Compliance & Ethics Office and are the responsibility of the Chief Strategy and Product Officer. To ensure top-level support and direction for the Compliance & Ethics Program and promote open communication between the Compliance & Ethics Office and the members of the EMT, the Board has further, through the Charter established a Compliance Commit - tee. The Compliance Committee serves as the primary governance body for compliance and ethics matters at group level, supporting effective implementation, oversight, and continuous improvement of the Compliance & Ethics Program globally. It is chaired by the Gen - eral Counsel and Chief Corporate Affairs Officer and consists of the entire EMT. The Global Head of Compliance & Ethics and the Head of Global Audit Office are also attendees. In addition, other individuals may be directed to provide information and attend committee meet - ings as needed based on the nature of specific agenda items or emerging risks. The Compliance Committee is provided with regular updates from the Compliance & Ethics Office, while detailed reviews and decisions on regular compliance cases reported by the Compliance & Ethics Office are delegated to the General Counsel and Chief Corporate Affairs Officer and the Chief People Officer. Furthermore, the Com - pliance Committee reviews compliance-related matters reported by the Internal Audit and Internal Control functions, respectively, when appropriate. The Compliance Committee normally meets four times per year and ad hoc meetings may be called for if and when required. In addition, in the regionalisation set-up process (described on page 50), a China Compliance Committee has been established to serve as a governance body supporting effective implementation, oversight, and continuous improvement of the Compliance & Ethics Program in China. The China Compliance Committee is chaired by the General Counsel and Chief Corporate Affairs Officer and further consists of the President of Greater China, the Head of China Compliance & Ethics and the General Counsel for Geely Group. It may also appoint ad hoc members as needed based on the nature of specific agenda items or emerging risks, e.g. the Global Head of Compliance & Ethics, heads of management responsible for the relevant item or risk and the Head of Internal Audit (APAC). Volvo Car Group’s Code of Conduct reflects Volvo Car Group’s val- ues and culture and how it drives results in an ethical and responsible way by placing the emphasis on Volvo Car Group’s culture, values and commitments in addition to focusing on the requirements set out in Volvo Car Group’s corporate policies. The Compliance & Ethics Office supports the business operations in conducting business in a responsible and ethical manner, by designing, overseeing and moni - toring the development, implementation and maintenance of the Compliance and Ethics Program. The program consists of ten pro - gram elements designed on the basis of guidelines for “effective compliance program” and “adequate procedures”, such as the US Sentencing Guidelines and the UK Bribery Act Guidance (supporting the Foreign Corrupt Practices Act and the UK Bribery Act respec - tively), as well as guidance from European Anti-Trust Offices. In addi - tion to the Compliance & Ethics organisation described above, the program elements include: tone from the top and culture; risk assessment; a Compliance & Ethics framework (Code of Conduct and corporate policies, directives and guidelines); training, awareness and communication; due care; internal reporting and investigations; enforcing disciplinary actions and incentives; monitoring and audit; program assessment and continuous improvement. The Compliance & Ethics Office provides training regarding the Code of Conduct and the five main compliance and ethics risk areas as stated above, including on whistleblowing and how to raise concerns using the Tell Us reporting line. More information about the performance of the Compliance & Ethics Program, and the risk areas it covers, is availa - ble on page 48. In addition to the areas covered by the Compliance & Ethics Program, and though Volvo Car Group is generally not subject to OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE CORPORATE GOVERNANCE REPORT BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM EXTENDED EXECUTIVE MANAGEMENT TEAM AUDITOR’S REPORT FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / CORPORATE GOVERNANCE 48 ===== SIDA 49 ===== anti-money laundering laws and regulations for financial institutions, there are measures in place to combat money laundering and terror - ist financing, overseen by Group Treasury Internal control The Board takes the responsibility for ensuring an effective internal control system exists within the Group; this is in line with the require - ments of the Swedish Companies Act and Swedish Corporate Governance Code. Volvo Car Group has an internal control function which supports the Board and the EMT in execution of their internal control respon - sibilities. The purpose of the internal control function is to support in defining effective and efficient internal controls to adequately ensure compliance with external and internal requirements (policies, directives and guidelines) for financial reporting, digital environment, sustainability reporting (read along with the Sustainability State - ment, starting page 130) and other relevant reporting to the Board. The Internal Control function regularly reports to the Audit Commit - tee on a periodic basis which includes topics including but not limited to internal control risks, scope, plan and status updates. Volvo Car Group uses the principles laid out by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework to set its own Internal Control framework which is explained further into; (a) Control Environment, (b) Risk Assessment, (c) Control Activities, (d) Information and Communication and (e) Monitoring. (a) Control Environment The foundation of Volvo Car Group’s control environment originates from the Volvo Car Group’s strategic direction (as further elaborated on page 21) which creates the appropriate culture within the Volvo Car Group and provides a clear tone from the top. Our values, which derive from our Code of Conduct, provide the guiding principles to define our corporate policies, directives and guidelines. The foundation of internal controls is based upon our policies, directives and guidelines which also define our responsibility and authority structure. (b) Risk Assessment Volvo Car Group has a dynamic and iterative risk assessment process to identify and assess risks which affect achievement of our objec - tives. Risk assessment starts at the enterprise risk level which is managed by the Enterprise Risk Management (“ERM”) function and elaborated further in the Risk section of the Annual Report, on pages 37–41. Risk assessment over the Internal Control environment is per - formed at least once every year using different sources, including but not limited to; continuous dialogues with management, assess the impact of enterprise risks, assessment of the annual group financial statements, assessing risks relating to controls over sustainability reporting, assess any impact on controls due to internal require - ments (policies and directives defined by different functions), assess any impact on controls due to external requirements and assess impact of any control issues identified. Summary of the relevant risks is reported to Audit Committee at least once every year. (c) Control activities Control activities are the actions established which help to address risks and implement the internal and external requirements to ensure the achievement of objectives. Control activities help to ensure that potential risks are prevented or detected and corrected. Control activities are defined throughout the organisation to manage risks, and these control activities are maintained in our internal control frameworks. While the controls are defined in the frameworks which are maintained by the Internal Control function, the control owner - ship for each control is spread across the organisation and the framework points at the job role within the organisation who is the control owner for each control. Further, it is analysed iteratively for need to update any controls activities or define controls activities in new areas of risks. Internal Control frameworks are reviewed at least once every year. (d) Information and Communication Information is necessary to enable the personnel to carry out their responsibility to support the achievements of objectives while com - munication helps to iteratively provide, share and obtain information. Volvo Car Group’s policies, directives and guidelines are updated and communicated on a regular basis by the responsible policy owners and maintained in the central repository. The respective functions in the Volvo Car Group takes the operating responsibility to ensure that these policies, directives and guidelines are included in their daily operations. Internal Control related information is maintained on various platforms, including the directives, internal SharePoint and GRC (Governance, Risk and Compliance) tool. Further, there are various forms of communication to provide, share and obtain information around internal controls like; continuous communication channels with key stakeholders, learning and trainings provided, newsletters shared and the internal SharePoint for internal controls. (e) Monitoring Regular or specific evaluations are performed to ensure risks are being appropriately addressed by verifying that the organisation is performing the controls as defined in the control frameworks. These evaluations can be in the form of self-assessments or independent reviews or a combination thereof, performed by the Internal Control team. The method used for monitoring of controls is determined based on factors such as the assessed level of risk associated and suitability to the purpose of monitoring. Results from monitoring activities are reported at least once every year to the Audit Committee. Issue process is defined to ensure any control issues / risks are recorded, analysed, actioned and resolved. These control issues or risks can be noted through multiple sources like monitoring proce - dures or self-identified risk by operations or risks identified by inter - nal or external auditors. External auditors The Company’s auditors are appointed by the Annual General Meet - ing. At the Annual General Meeting held on 3 April 2025, Deloitte AB was re-elected until the next Annual General Meeting as the Compa - ny’s auditor. Fredrik Jonsson is the auditor in charge. The external auditors discuss the external audit plan, audit find - ings and risk management with the Audit Committee. The auditor reviews one interim report per year and presents the results of its work to Audit Committee. The auditor also examines the Corporate Governance Report and provide a limited assurance of the Sustaina - bility Report and the Green Financing Report. The results of its finan - cial year audit and the audit of the Annual Report of the parent com - pany and the consolidated financial statements are presented to the Audit Committee and the Board of Directors at meetings after year end. An opinion regarding the compliance with the guidelines for executive remuneration is made in conjunction with the Annual Gen - eral Meeting. When Deloitte is asked to provide services other than the external audit, this is done in accordance with general independ - ence rules. Deloitte provides an annual written assurance of its impartiality and independence to the Audit Committee in accord - ance with the Swedish Companies Act and ISA 260. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE CORPORATE GOVERNANCE REPORT BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM EXTENDED EXECUTIVE MANAGEMENT TEAM AUDITOR’S REPORT FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / CORPORATE GOVERNANCE 49 ===== SIDA 50 ===== CEO and the Executive Management Team The division of work between the Board and the CEO is set out in the rules of procedures for the Board and follows the Swedish Compa - nies Act. The CEO is responsible for Volvo Car Group’s everyday management and operations and for the preparation of reports and compiling information for the Board meetings and for presenting such material at the Board meetings. The CEO is further responsible for Volvo Car Group’s financial reporting and consequently must ensure that the Board receives adequate information for the Board to be able to evaluate the Group’s financial condition. The CEO regularly keeps the Board informed of the developments in Volvo Car Group’s operations, the development of sales, Volvo Car Group’s results and financial posi - tion, important business events and all other events, circumstances or conditions which can be assumed to be of significance to Volvo Car Group’s shareholders. The CEO leads the work of the EMT, which is responsible for the overall business development and operations of Volvo Car Group. In addition to the CEO, the EMT consists of the Chief Financial Officer, the General Counsel and Chief Corporate Affairs Officer, the Chief People Officer, the Chief Commercial Officer, the Chief Strategy & Product Officer, the Chief Industrial Operations Officer, the Chief Engineering & Technology Officer and the Chief Design Officer. The EMT’s role is to assist the CEO in the operation of Volvo Car Group’s business, set the strategic long-term direction in dialogue with the Board and take corporate and strategic decisions as delegated by the Board. The strategic direction is supported by functional strategies that guide the Company’s priorities. In order to assist the EMT in car - rying out decisions and actions related to certain topics to fulfil the Group’s strategic direction as further elaborated on page 21, the CEO has established the Extended Executive Management Team (EMTe) which in addition to the EMT includes a number of other senior management positions within Volvo Car Group. The EMTe shall have shorter term tactical focus and support EMT to drive performance and execution based on direction set by EMT. The EMT and EMTe’s work includes three operational fora; the Prod - uct Board, the Corporate Board and the Digital Board, covering cross-functional topics related to the product portfolio, corporate matters and projects and the digital landscape, respectively, which supports the EMT to provide guidance, deliver strategic directions and approve decisions within its respective responsibilities. The EMT meets on a weekly basis and the whole EMTe meets bi-weekly. Regionalisation Volvo Car Group has during 2025, with the support from the Board, started a regionalisation strategy, to empower Volvo Cars regions by providing them with greater operational autonomy. For the China region specifically, the operations are run through the existing company Daqing Volvo Car Manufacturing Co., Ltd. (“Daqing Joint Venture”), being a 50/50 joint venture between Volvo Car Group and Zhejiang Geely Holding Group Ltd and consolidated into Volvo Car Group. The board of the Daqing Joint Venture has been strength - ened to include Håkan Samuelsson (as director and chairperson), Ruby (Rong) Lu and Geert Bruyneel as Volvo Car Group representa- tives and Daniel (Donghui) Li together with An Conghui as Zhejiang Geely Holding Group Ltd representatives. The governance of the Daqing Joint Venture is built to apply Volvo Car Group’s Code of Conduct and following Volvo Car Group’s policies and directives and leveraging on Zhejiang Geely Holding Group Ltd’s knowledge of the Chinese market. From a corporate governance perspective, the responsibility for Volvo Car Group remains with the Board for all consolidated entities, including the Daqing Joint Venture. Other than the establishment of the additional China Compliance Committee in order to strengthen the Compliance & Ethics Function in the China region, Volvo Car Group’s regionalisation efforts do not affect the corporate govern - ance structure set out in this report. Gothenburg 4 March 2026 Volvo Car AB (publ.) Board of Directors OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE CORPORATE GOVERNANCE REPORT BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM EXTENDED EXECUTIVE MANAGEMENT TEAM AUDITOR’S REPORT FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / CORPORATE GOVERNANCE 50 ===== SIDA 51 ===== ERIC LI (LI SHUFU) HÅKAN SAMUELSSON CHAIRPERSON AND MEMBER OF THE BOARD Born 1963. Chairperson and member of the Board since 2010. Education: Bachelor’s Degree in Management Engineering from the Harbin University of Science and Technology, China. Master’s Degree in Mechanical Engineering from the Yanshan University, China. Principal activities outside of Volvo Car Group and current board assign - ments and similar: Founder of Zhejiang Geely Holding Group Co. Ltd, Ecarx Holdings Inc and PSD Capital Limited (indirect shareholder in Polestar). Chairman of the Board of Zhejiang Geely Holding Group Co. Ltd, Geely Technology Group Co. Ltd, Geely Talents Development Group Co. Ltd, PSD Capital Limited and PSD Investment Limited, and smart Automobile Co. Ltd. Member of the Board of Geely Group Limited, and Geely Sweden Holdings AB and a number of other companies within his ownership. Professional experience: Former CEO of Zhejiang Geely Holding Group Co. Ltd. Holdings in Volvo Car AB (publ.), own and related parties: 2,349,935,270 B shares.1) 2) Not independent in relation to the company and Executive Management Team nor the Company’s major shareholders. BOARD MEMBER, PRESIDENT AND CEO Born 1951. Member of the board since 2025 Education: Master of Science in Mechanical Engineering from KTH Royal Institute of Technology, Sweden. Principal activities outside of Volvo Car Group and current board assign - ments and similar: Board member in ABB E-Mobility, Modular Management Group Stockholm AB and Business Sweden. Professional experience: Former CEO of MAN AG. Previous experience from executive management (EVP) at Scania Group. Board member of Volvo Car AB from 2010-2022 and President and CEO of Volvo Car AB from 2012– 2022. Previous Chairman of Polestar Automotive Holding UK LLC. Previous Board member of Lynk & Co Investment Co., Ltd., Lynk & Co Europe AB, AB Volvo, China-Euro Vehicle Technology Aktiebolag and Zenuity AB. Previous Board member of Ideella föreningen Teknikarbetsgivarna i Sverige and Ideella föreningen Teknikföretagen i Sverige. Previous senior advisor to Geely Sweden Holdings AB. Holdings in Volvo Car AB (publ.), own and related parties: 2,186,631 shares and 2,500,000 call options. 1) 2) 3) Håkan Samuelsson is as CEO not independent in relation to the company and the Executive Management Team but he is independent in relation to the company’s major shareholders. 1) Information on holdings in shares is per 16 February 2026. 2) For information on transactions, please refer to the website of the Swedish Financial Supervisory Authority. PDMR transactions register | Finansinspektionen Board of Directors Volvo Car AB (publ.) Volvo Car AB (publ.) is the parent company of the Volvo Car Group 3) The call options have been issued by Nordea Bank Abp. The term is 2 years, and each call option entitles the holder to acquire one B share in Volvo Car AB at an exercise price of SEK 53. JONAS SAMUELSON BOARD MEMBER AND CHAIRPERSON OF PEOPLE COMMITTEE AND AUDIT COMMITTEE Born 1968. Board member since 2020. Education: Master of Science in Economics and Business Administration from the School of Business, Economics and Law at the University of Gothenburg, Sweden. Principal activities outside of Volvo Car Group and current board assign - ments and similar: Chairman of the Board of Axel Johnson International and Rosti Group AB. Board member at Axel Johnson AB, Perrigo Plc and Ansell Ltd. Professional experience: Previous experience from finance in various roles at Saab Automobile AB and General Motors Corporation. Former CFO at Munters AB and CFO, COO, CEO Major Appliances EMEA and CEO and board member at AB Electrolux. Former board member in Polygon AB. Holdings in Volvo Car AB (publ.), own and related parties: 19,807 B shares.1) 2) Independent in relation to the company and Executive Management Team as well as the company’s major shareholders. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 CORPORATE GOVERNANCE REPORT BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM EXTENDED EXECUTIVE MANAGEMENT TEAM AUDITOR’S REPORT FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / CORPORATE GOVERNANCE / BOARD OF DIRECTORS 51 ===== SIDA 52 ===== LILA TRETIKOV BOARD MEMBER AND MEMBER OF THE AUDIT COMMITTEE Born 1978. Board member since 2021. Education: Studies in Computer Science at the University of California Berkeley, United States. Studies at SAAD School of Business, University of Oxford, United Kingdom. Principal activities outside of Volvo Car Group and current board assign - ments and similar: Partner, Head of AI Strategy of NEA. Board member of Xylem Inc. UBS. Board member of CapGemini, Backflip, Zendesk, CuspAI and Horizon3. Professional experience: Previously Corporate VP and Deputy CTO of Microsoft. Previous experience includes CEO of Engie SA, Terrawatt Initia - tive and Wikimedia Foundation and several senior positions within Sugar - CRM Inc., Software General Manager of Evolving Systems Inc., Digital General Manager of Bank of America and founder of GrokDigital. Holdings in Volvo Car AB (publ.), own and related parties: 1,197 B shares.1) 2) Independent in relation to the company and Executive Management Team as well as the company’s major shareholders. DANIEL LI (LI DONGHUI) BOARD MEMBER AND MEMBER OF THE AUDIT COMMITTEE Born 1970. Board member since 2012. Education: Bachelor of Philosophy from the Renmin University of China. Master of Management Engineering from the Beijing Institute of Machinery Industry, China. Master of Business Administration from the Kelly School of Business at Indiana University, United States. Principal activities outside of Volvo Car Group and current board assign - ments and similar: Executive Vice Chairman of Zhejiang Geely Holding Group Co. Ltd. Chairman of Lotus Group International Ltd and Lotus Tech - nology Inc. Board member of Geely Sweden Holdings AB, Geely Automobile Holdings Ltd and Aston Martin Lagonda Global Holdings. Independent Board member of YTO International Express & Supply Chain Technology Ltd. Professional experience: Previously CEO, VP and CFO of Zhejiang Geely Holding Group Co. Ltd. Previous experience from key accounting, financing and corporate management positions, such as CFO and General Manager of several companies, including Guangxi Liugong Machinery Co. Ltd, China Academy of Post & Telecommunication, Cummins Inc., BMW Brilliance Automotive Ltd., ASIMCO Braking System (Guangzhou) Co. Ltd. and ASIMCO Braking System (Zhuhai) Co. Ltd. Previously Board member of Pro - ton Holdings Berhad, ZEEKR Intelligent Technology Holding Ltd, Polestar Automotive Holding UK Plc, Saxo Bank A/S and independent Board member of China CYTS Tours Holding Co. Ltd. Holdings in Volvo Car AB (publ.), own and related parties: 0 B shares.1) 2) Independent in relation to the company and Executive Management Team but not in relation to the company’s major shareholders. DIARMUID O’CONNELL BOARD MEMBER AND MEMBER OF PEOPLE COMMITTEE Born 1963. Board member since 2021. Education: Bachelor of Arts in History and Government from Dartmouth College, United States. Master of Arts in Foreign Policy and Political Econ - omy from the University of Virginia, United States. MBA in Strategy and Finance from Kellogg Graduate School of -Management, United States. Principal activities outside of Volvo Car Group and current board assign - ments and similar: Advisor to SK On. Chairman of the board of Clarios. Member of the Supervisory Board of Albemarle Corp, Dana Inc. and Mobility House Holding AG. Professional experience: Previous experience from Accenture Consulting, Real Time Learning McCann Ericson, Young & Rubicam and the U.S Depart - ment of State. Several executive roles at Tesla. Member of the Executive team of Fair Financial Corp. Energy/Mobility Consulting for Antin Infrastruc - ture Partners Holdings in Volvo Car AB (publ.), own and related parties: 599 B shares.1) 2) Independent in relation to the company and Executive Management Team as well as the company’s major shareholders. 1) Information on holdings in shares is per 16 February 2026. 2) For information on transactions, please refer to the website of the Swedish Financial Supervisory Authority. PDMR transactions register | Finansinspektionen OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 CORPORATE GOVERNANCE REPORT BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM EXTENDED EXECUTIVE MANAGEMENT TEAM AUDITOR’S REPORT FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / CORPORATE GOVERNANCE / BOARD OF DIRECTORS 52 ===== SIDA 53 ===== RUBY LU (RONG LU) BOARD MEMBER Born 1971. Board member since 2023. Education: M.A. from Johns Hopkins University School of Advanced Inter - national Studies (SAIS) and a B.A. with honors from the University of Mary - land. Principal activities outside of Volvo Car Group and current board assign - ments and similar: Founder and managing partner of Atypical Ventures. Independent board member of Unilever (NYSE: UL) and an independent board member of YUM China (NYSE: YUMC) and Kuaishou (1024.HK). Professional experience: Venture capitalist investing in technology start- ups in the US and China. Founder of Atypical Ventures, an early-stage tech - nology investment firm. Co-founder of DCM China, a venture capital firm. Prior to becoming a venture capitalist, Vice President in Goldman Sachs’ technology media and telecommunication banking group in the US. Former advisor to and a shareholder in EcarX Holdings, Inc (Nasdaq: ECX). Holdings in Volvo Car AB (publ.), own and related parties: 65,000 B shares.1) 2) Independent in relation to the company and Executive Management Team as well as the company’s major shareholders. 1) Information on holdings in shares is per 16 February 2026. 2) For information on transactions, please refer to the website of the Swedish Financial Supervisory Authority. PDMR transactions register | Finansinspektionen PIETER NOTA BOARD MEMBER Born 1964. Board member since 2025. Education: Master’s degree in Business Administration from the Erasmus University of Rotterdam, the Netherlands. Principal activities outside of Volvo Car Group and current board assign - ments and similar: Senior Advisor to McKinsey & Company and Board member in Fortaegis Technologies. Professional experience: Former Member of the Board of Management (Vorstand) of BMW AG, responsible for Customers, Brands and Sales. Earlier senior executive positions at Royal Philips NV (CEO, Consumer Lifestyle as well as member of the Board of Management), Beiersdorf AG (member of the Board of Management) and Unilever, all but Unilever with a global responsibility. Holdings in Volvo Car AB (publ.), own and related parties: 0 shares.1) 2) Independent in relation to the company and Executive Management Team as well as the company’s major shareholders. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 CORPORATE GOVERNANCE REPORT BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM EXTENDED EXECUTIVE MANAGEMENT TEAM AUDITOR’S REPORT FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / CORPORATE GOVERNANCE / BOARD OF DIRECTORS 53 ===== SIDA 54 ===== CAROLINE GRÉGOIRE-SAINTE-MARIE BOARD MEMBER AND MEMBER OF THE AUDIT COMMITTEE Born 1957. Board member since 2025. Education: Graduate of Sciences Po Paris and Université Paris 1 Panthéon Sorbonne (Commercial Law). Principal activities outside of Volvo Car Group and current board assign - ments and similar: Independent Director and Audit Committee member at VINCI S.A. (since 2019) and Director of Fnac Darty (Audit and CSR Commit - tees). Professional experience: Extensive executive and board experience across industrial, construction, and finance sectors. Previous board roles include Elior Group, Bluestar Adisseo, FLSmidth, Wienerberger, Elkem, Groupama, Eramet, and Safran. Former executive positions include CEO and Chair - woman of Lafarge Germany, Tarmac France and Belgium and Frans Bon - homme Group. Holdings in Volvo Car AB (publ.), own and related parties: 0 shares.1) 2) Independent in relation to the company and Executive Management Team as well as the company’s major shareholders. 1) Information on holdings in shares is per 16 February 2026. 2) For information on transactions, please refer to the website of the Swedish Financial Supervisory Authority. PDMR transactions register | Finansinspektionen ANNA MOSSBERG BOARD MEMBER Born 1972. Board member since 2022. Education: MBA from Stanford University, USA, MBA from IE University, Spain, Master of Industrial Engineering and Management from Luleå Technical University Sweden. Principal activities outside of Volvo Car Group and current board assign - ments and similar: Board member and member of the Finance and Strategy Committee in Swisscom AG, Board member and member of the Remunera - tion and Sustainability Committee and Audit Committee in Swedbank AB, Board member and member of the Nomination and Compensation Commit - tee in Ringier AG. Professional experience: Previous experiences include CEO of Silo AB, Business Area Manager at Google Sweden, Senior Vice President Strategy and Portfolio Management at Deutsche Telekom AG, CEO of Bahnhof AB and Vice President of Telia International Carrier AB. Previous board member and member of the Audit Committee in Schibsted ASA, Orkla ASA, Marshall AB and Byggfakta AB. Holdings in Volvo Car AB (publ.), own and related parties: 5,687 B shares.1) 2) Independent in relation to the company and Executive Management Team as well as the company’s major shareholders. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 CORPORATE GOVERNANCE REPORT BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM EXTENDED EXECUTIVE MANAGEMENT TEAM AUDITOR’S REPORT FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / CORPORATE GOVERNANCE / BOARD OF DIRECTORS 54 ===== SIDA 55 ===== Employee representatives JÖRGEN OLSSON ADRIAN AVDULLAHU ANNA MARGITINZARA BISKE MARIE STENQVIST BOARD MEMBER, REPRESENTATIVE OF UNIONEN Born 1968. Board member since 2016. Education: Upper secondary school education. Principal activities outside of Volvo Car Group and current board assignments and similar: Chairman of Unionen, Volvo Car Group. Professional experience: Previously employee representative of the Board of Volvo Bil i Göte- borg AB. Holdings in Volvo Car AB (publ.), own and related parties: 580 B shares.1) 2) BOARD MEMBER, REPRESENTATIVE OF IF METALL Born 1978. Board member since 2021. Education: Upper secondary school education. Leadership training at Bommersvikakademin and IF Metall Stockholm. Principal activities outside of Volvo Car Group and current board assignments and similar: Chairman of IF Metall, Volvo Car Group. Chairman IF Metall Group Volvo Car Sweden. Board member IF Metall Central Organization. Board member IF Metall Section 36 Gothenburg. Holdings in Volvo Car AB (publ.), own and related parties: 800 B shares.1) 2) DEPUTY BOARD MEMBER, REPRESENTATIVE OF AKADEMIKERNA Born 1969. Deputy Board member since 2016. Education: Physics, Mathematics and Electri - cal engineering from the University of Gothen - burg, Sweden. Executive MBA Business and Law from the School of Business, Economics and Law at the University of Gothenburg, Sweden. Principal activities outside of Volvo Car Group and current board assignments and similar: — Professional experience: Previous experience from several positions within Volvo Car Group, such as Chief Program Engineer, Senior Direc - tor Business Quality, Senior Director Current Model Quality, Senior Director Customer Service and Commercial Office. Holdings in Volvo Car AB (publ.), own and related parties: 786 B shares.1) 2) BOARD MEMBER, REPRESENTATIVE OF IF METALL Born 1990. Board member since 2024. Education: Upper secondary school education. Principal activities outside of Volvo Car Group and current board assignments and similar: Union representative of IF Metall. Holdings in Volvo Car AB (publ.), own and related parties: 701 B shares.1) 2) DEPUTY BOARD MEMBER, REPRESENTATIVE IF METALL Born 1963. Deputy Board Member since 2022. Education: Upper secondary education Principal activities outside of Volvo Car Group and current board assignments and similar: Vice chairman of IF Metall, Gothen - burg. Holdings in Volvo Car AB (publ.), own and related parties: 538 B shares.1) 2) 1) Information on holdings in shares is per 16 February 2026. 2) For information on transactions, please refer to the website of the Swedish Financial Supervisory Authority. PDMR transactions register | Finans- inspektionen OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 CORPORATE GOVERNANCE REPORT BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM EXTENDED EXECUTIVE MANAGEMENT TEAM AUDITOR’S REPORT FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 55 VOLVO CAR GROUP  / CORPORATE GOVERNANCE / EMPLOYEE REPRESENTATIVES ===== SIDA 56 ===== Executive Management Team HÅKAN SAMUELSSON PRESIDENT AND CEO Born 1951. Member of EMT since 2025. Education: Master of Science in Mechanical Engineering from KTH Royal Institute of Technology, Sweden. Principal activities outside of Volvo Car Group and current board assign - ments and similar: Board member in ABB E-Mobility, Modular Management Group Stockholm AB and Business Sweden. Professional experience: Former CEO of MAN AG. Previous experience from executive management (EVP) at Scania Group. Board member of Volvo Car AB from 2010-2022 and President and CEO of Volvo Car AB from 2012– 2022. Previous Chairman of Polestar Automotive Holding UK LLC. Previous Board member of Lynk & Co Investment Co., Ltd., Lynk & Co Europe AB, AB Volvo, China-Euro Vehicle Technology Aktiebolag and Zenuity AB. Previous Board member of Ideella föreningen Teknikarbetsgivarna i Sverige and Ideella föreningen Teknikföretagen i Sverige. Previous senior advisor to Geely Sweden Holdings AB. Holdings in Volvo Car AB (publ.), own and related parties: 2,186,631 shares and 2,500,000 call options. 1) 2) 3) Håkan Samuelsson is as CEO not independent in relation to the company and the Executive Management Team but he is independent in relation to the company’s major shareholders. 1) Information on holdings in shares is per 16 February 2026. 2) For information on transactions, please refer to the website of the Swedish Financial Supervisory Authority. PDMR transactions register | Finansinspektionen 3) The call options have been issued by Nordea Bank Abp. The term is 2 years, and each call option entitles the holder to acquire one B share in Volvo Car AB at an exercise price of SEK 53. HELEN HU GENERAL COUNSEL & CHIEF CORPORATE AFFAIRS OFFICER Born 1976. Member of EMT since 2024. Education: Juris Doctor, cum laude, from University of Minnesota Law school. Current board assignments and similar: – Professional experience: Previous experience within Volvo Cars as Head of Legal, deputy General Counsel, Managing Director of Volvo Car Switzerland, Head of Legal and Deputy CEO for Volvo Car Asia Pacific. Prior to that expe - rience at among others General Counsel, Asia at Luxottica Group S.p.A. Holdings in Volvo Car AB (publ.), own and related parties: 52,304 B shares.1) 2) FREDRIK HANSSON CHIEF FINANCIAL OFFICER Born 1982. Member of EMT since 2025. Education: Master of Science in Finance from studies at Gothenburg School of Business, Economics and Law. Current Board assignments and similar: Board member in Wendelsberg Invest AB. Professional experience: Previous experience within Volvo Cars as deputy CFO and member of Volvo Cars’ Group Management Team and Head of Global Controlling & Performance Steering. Member of the board at NOVO Energy AB. Partner at McKinsey & Company. Holdings in Volvo Car AB (publ.), own and related parties: 34,210 B shares.1) 2) OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 CORPORATE GOVERNANCE REPORT BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM EXTENDED EXECUTIVE MANAGEMENT TEAM AUDITOR’S REPORT FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 56 VOLVO CAR GROUP  / CORPORATE GOVERNANCE / EXECUTIVE MANAGEMENT TEAM ===== SIDA 57 ===== 1) Information on holdings in shares is per 16 February 2026. 2) For information on transactions, please refer to the website of the Swedish Financial Supervisory Authority. PDMR transactions register | Finansinspektionen ERIK SEVERINSON CHIEF COMMERCIAL OFFICER Born 1979. Member of EMT since 2024. Education: MSc at University of Gothenburg, School of Business, Economics and Law. Studies at Universität Mannheim and WHU - Otto Beisheim School of Management. Current Board assignments and similar: Chairman of the Board of VCLC Services AB. Professional experience: Various roles within Volvo Car Group since 2004, for example Chief Product & Strategy Officer and Head of Strategy & Pro - gram Management. Holdings in Volvo Car AB (publ.), own and related parties: 17,896 B shares.1) 2) FRANCESCA GAMBONI CHIEF INDUSTRIAL OPERATIONS OFFICER Born 1966. Member of EMT since 2024. Education: Master of Science in Industrial Technology Engineering from Politecnico di Milano. Current Board assignments and similar: Member of the Board of Polestar Automotive Holding UK PLC and member of the Board of E-mobility Europe Professional experience: Chief Supply Chain Officer at Accell, Senior Vice President Global Supply Chain at Stellantis, Nordic Operations Director at L’Oreal, Vice President at Renault-Nissan. Roles previous to that include time at Alcan (now Rio Tinto), Bosch and Price Waterhouse. Previous member of the supervisory board of Opel, Gefco and Headmind partners. Holdings in Volvo Car AB (publ.), own and related parties: 20,000 B shares.1) 2) HANNA FAGER CHIEF PEOPLE OFFICER Born 1975. Member of EMT since 2016. Education: Bachelor of Science in Human Resource Development, Labour Relations from University West, Sweden. Studies in labour law and EU law at Halmstad University. Current Board assignments and similar: Vice chairman of Teknikföretagen. Professional experience: Several positions within Volvo Car Group, such as SVP Corporate Functions, Senior Director HR Marketing, Sales & Services, VP HR, Centre of Expertise and VP Employee & Benefits. Holdings in Volvo Car AB (publ.), own and related parties: 43,600 B shares.1) 2) OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 CORPORATE GOVERNANCE REPORT BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM EXTENDED EXECUTIVE MANAGEMENT TEAM AUDITOR’S REPORT FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 57 VOLVO CAR GROUP  / CORPORATE GOVERNANCE / EXECUTIVE MANAGEMENT TEAM ===== SIDA 58 ===== 1) Information on holdings in shares is per 16 February 2026. 2) For information on transactions, please refer to the website of the Swedish Financial Supervisory Authority. PDMR transactions register | Finansinspektionen ANDERS BELL CHIEF ENGINEERING & TECHNOLOGY OFFICER Born 1974. Member of EMT since 2024. Education: Engineering and Product Development at Halmstad University. Current Board assignments and similar: — Professional experience: Previously Automotive Engineering at Volvo Cars 1998–2016 and Tesla 2016–2022. Holdings in Volvo Car AB (publ.), own and related parties: 0 B shares.1) 2) MICHAEL FLEISS THOMAS INGENLATH CHIEF STRATEGY AND PRODUCT OFFICER Born 1973. Member of EMT since 2025. Education: Mechanical Engineering at University of Applied Science Lübeck Current Board assignments and similar: — Professional experience: Global Sales Officer at Horse Powertrain Ltd, CEO at Aurobay Sweden, Managing Director at Powertrain Engineering Sweden, Vice President roles at Volvo Cars, Engineering Director roles at Bentley Motors and Volkswagen AG. Holdings in Volvo Car AB (publ.), own and related parties: 45,500 B shares.1) 2) CHIEF DESIGN OFFICER Born 1964. Member of EMT since 2026. Education: MA in Vehicle Design from Royal College of Art, London. Undergraduate Design Degree from Fachhochschule für Gestaltung in Pforzheim, Germany. Current Board assignments and similar: — Professional experience: Senior Design Adviser for Geely Group 2025- 2026, Previously CEO of Polestar, Senior Vice President of Design at Volvo Cars and Director of Design at Volkswagen Design Center. Holdings in Volvo Car AB (publ.), own and related parties: 63,044 B shares.1) 2) OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 CORPORATE GOVERNANCE REPORT BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM EXTENDED EXECUTIVE MANAGEMENT TEAM AUDITOR’S REPORT FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 58 VOLVO CAR GROUP  / CORPORATE GOVERNANCE / EXECUTIVE MANAGEMENT TEAM ===== SIDA 59 ===== FOR MORE INFORMATION ABOUT THE EMTe MEMBERS PLEASE SEE INVESTORS.VOLVOCARS.COM Extended Executive Management Team AREK NOWINSKI PRESIDENT OF EMEA & APEC XIAOLIN YUAN PRESIDENT OF GREATER CHINA AKHIL KRISHNAN PRODUCT LINE OWNER 60 JOHAN TAWS HEAD OF QUALITY LUIS REZENDE PRESIDENT OF AMERICAS KARIN THORN HEAD OF PROPULSION & ENERGY GUY LEDERER HEAD OF PLANNING AND LOGISTICS LUTZ STIEGLER HEAD OF ARCHITECTURE STRATEGY MALIN VULCAN HEAD OF VEHICLE ENGINEERING FREDRIK OHLSSON HEAD OF DIGITAL CORE JENNY ÅSTRÖM HEAD OF COMMUNICATION ALWIN BAKKENES HEAD SOFTWARE ENGINEERING JESSICA SPAN HEAD OF CUSTOMER EXCELLENCE NICOLAS GUIBERT HEAD OF PRODUCTION ALEXANDER PETROFSKI PRODUCT LINE OWNER 30/40 ERIC APODE HEAD OF PROCUREMENT OSCAR BERTILSSON OLSBORG PRODUCT LINE OWNER 90 & HEAD OF COMMERCIAL OPERATIONS OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 CORPORATE GOVERNANCE REPORT BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM EXTENDED EXECUTIVE MANAGEMENT TEAM AUDITOR’S REPORT FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 59 VOLVO CAR GROUP  / CORPORATE GOVERNANCE / EXTENDED EXECUTIVE MANAGEMENT TEAM ===== SIDA 60 ===== Auditor’s report on the corporate governance statement To the general meeting of the shareholders in Volvo Car AB (publ.) corporate identity number 556810-8988 Engagement and responsibility It is the board of directors who is responsible for the corporate gov - ernance statement for the financial year 2025-01-01–2025-12-31 on pages 42–59 and that it has been prepared in accordance with the Annual Accounts Act. The scope of the audit Our examination has been conducted in accordance with FAR’s standard RevR 16 The auditor’s examination of the corporate gov - ernance statement. This means that our examination of the corpo - rate governance statement is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with suffi - cient basis for our opinions. Opinions A corporate governance statement has been prepared. Disclosures in accordance with chapter 6 section 6 the second paragraph points 2–6 the Annual Accounts Act and chapter 7 section 31 the second paragraph the same law are consistent with the annual accounts and the consolidated accounts and are in accordance with the Annual Accounts Act. Gothenburg, 4 March, 2026 Deloitte AB Signature on Swedish original Fredrik Jonsson Authorized Public Accountant This is a translation of the Swedish language original. In the event of any differences between this translation and the Swedish language original, the latter shall prevail. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 CORPORATE GOVERNANCE REPORT BOARD OF DIRECTORS EXECUTIVE MANAGEMENT TEAM EXTENDED EXECUTIVE MANAGEMENT TEAM AUDITOR’S REPORT FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 60 VOLVO CAR GROUP  / CORPORATE GOVERNANCE ===== SIDA 61 ===== Financials OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 61 VOLVO CAR GROUP ===== SIDA 62 ===== CONTENTS FINANCIAL REPORT CONSOLIDATED FINANCIAL STATEMENTS PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT 63 Consolidated Income Statements 65 Consolidated Comprehensive Income 66 Consolidated Balance Sheets 119 Income Statements and Comprehensive Income 119 Balance Sheets 67 Consolidated Statement of Changes in Equity 69 Consolidated Statement of Cash Flows 120 Statement of Changes in Equity 120 Statement of Cash Flows NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS 70 Note 1 General information for financial reporting in Volvo Car Group 72 Note 2 Revenue 74 Note 3 Expenses by nature 74 Note 4 Related party transactions 75 Note 5 Audit fees 75 Note 6 Other operating income and expenses 76 Note 7 Leases 77 Note 8 Employees and remuneration 80 Note 9 Share-based remuneration 84 Note 10 Government grants 84 Note 11 Other financial income and expenses 84 Note 12 Investments in joint ventures and associates 88 Note 13 Taxes 89 Note 14 Earnings per share 89 Note 15 Intangible assets 91 Note 16 Tangible assets 121 Note 1 Accounting policies 121 Note 2 Critical accounting estimates and judgements 121 Note 3 Related party transactions 122 Note 4 Audit fees 122 Note 5 Remuneration to the board of directors 122 Note 6 Other financial income and expenses 93 Note 17 Inventories 93 Note 18 Accounts receivable and other current and non-current assets 94 Note 19 Financial instruments and financial risks 106 Note 20 Marketable securities and cash and cash equivalents 106 Note 21 Equity 107 Note 22 Post-employment benefits 111 Note 23 Current and other non-current provisions 112 Note 24 Other current and non-current liabilities 112 Note 25 Contingent liabilities and pledged assets 112 Note 26 Cash flow statements 113 Note 27 Business combinations and divestments 114 Note 28 Segment reporting 115 Alternative performance measures 122 Note 7 Taxes 122 Note 8 Participation in subsidiaries 125 Note 9 Equity 125 Note 10 Financial instruments 125 Note 11 Contingent liabilities 63 119 126 127 70 121 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 62 VOLVO CAR GROUP  / FINANCIALS ===== SIDA 63 ===== SEKm Note 2025 2024 Revenue 2 357,263 400,234 Cost of sales 3 –297,0421) –320,821 Gross income 60,221 79,413 Research and development expenses 3, 15 –26,0671) –16,983 Selling expenses 3 –23,213 –25,409 Administrative expenses 3 –10,476 –12,038 Other operating income and expenses 6 –8161) 2,057 Share of income in joint ventures and associates 12 654 –4,722 Operating income 4, 5, 7, 8, 9, 10 303 22,318 Interest income and similar credits 19 1,929 2,190 Interest expenses and similar charges 19 –1,251 –1,164 Other financial income and expenses 11 –1,647 –625 Income before tax –666 22,719 Income tax 13 –2,302 –6,785 Net income –2,968 15,934 Net income attributable to Owners of the parent company 174 15,401 Non-controlling interests –3,142 533 –2,968 15,934 Basic earnings per share (SEK) 14 0.06 5.17 Diluted earnings per share (SEK) 14 0.06 5.17 1) Impairment charge for the EX90 and ES90 platform CGU’s lifecycle profitability made in the second quarter 2025. Consolidated Income Statements Income and result Non-operating items affecting comparability are excluded from this text if not otherwise stated . Volvo Cars’ revenue amounted to SEK 357.3 (400.2) bn and whole - sale volumes declined by –11 per cent to 693.0 (782.6) thousand cars. The revenue decrease was primarily explained by lower wholesale volumes of SEK –34.4 bn and unfavourable sales mix and pricing of SEK –4.3 bn, partially offset by increased used car sales of SEK 6.0 bn. Revenue was also affected by the one-time sale of subscription car portfolios, amounting to SEK 5.2 (2.7) bn, which had no material impact on gross income. Foreign exchange rates had an unfavourable impact on revenue due to a stronger SEK compared to last year, amounting to SEK –14.1 bn. See complete revenue bridge on the next page. This year was impacted by a one-off non-cash impairment charge for the EX90 and ES90 platform due to reduced lifecycle profitabil - ity, which in total amounted to SEK –11.4 bn. Of this amount, SEK –4.0 bn impacted cost of sales and most of the remaining amount impacted research and development expenses. The year was also impacted by a restructuring cost as a part of the turnaround plan, which amounted to SEK –0.8 bn. Gross income decreased to SEK 64.3 (79.4) bn, resulting in a gross margin of 18.0 (19.8) per cent. Gross margin was impacted unfavourably by sales mix and pricing, higher US tariffs on imported goods and used cars. It was partially offset by material cost savings and revenue from earned emission credits which increased to SEK 3.5 (1.0) bn. Foreign exchange rate effects in the cost of sales were positive compared to last year, amounting to SEK 12.8 bn. The net effect of foreign exchange rates in gross income was negative versus last year, amounting to an impact of SEK –1.3 bn. Gross income including items affecting com - parability amounted to SEK 60.2 (79.4) bn with the corresponding margin of 16.9 (19.8) per cent. EBIT amounted to SEK 12.5 (24.0) bn, resulting in an EBIT margin of 3.5 (6.0) per cent. The decrease was mainly a consequence of sales mix and pricing and lower wholesale volume. These effects were partially offset by improved cost efficiency within selling and administrative expenses, as well as by the unrecognised share of Polestar losses. The exchange rate effects had a negative impact on EBIT compared to last year of SEK –1.7 bn. EBIT including items affecting comparability amounted to SEK 0.3 (22.3) bn with the corresponding margin of 0.1 (5.6) per cent. See complete EBIT bridge on the next page. Net financial items decreased to SEK –1.0 (0.4) bn, mainly as a result of changes in market valuations of financial investments and lower interest income attributable to lower interest rates. The effective tax rate increased to 42.2 (27.8) per cent. The increase was mainly explained by valuation adjustments to deferred tax assets in China of SEK –2.3 bn, of which SEK –1.8 bn related to deferred tax assets not recognised during the year. Net income was SEK 6.7 (17.6) bn, representing 1.9 (4.4) per cent of revenue. Net income including items affecting comparability amounted to SEK –3.0 (15.9) bn with the associated effective tax rate of –345.6 (29.9) per cent. Basic earnings per share amounted to SEK 0.06 (5.17). OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / CONSOLIDATED FINANCIAL STATEMENTS 63 ===== SIDA 64 ===== Research and development spending, SEKm 2025 2024 Research and development spending –26,378 –28,308 Capitalised development costs 15,855 18,724 Amortisation of capitalised development costs –8,171 –7,399 Impairment of capitalised development costs –7,373 — Research and development expenses –26,067 –16,983 Changes to Revenue, SEKbn Full year Revenue 2024 400.2 Volume –34.4 Sales mix and pricing –4.3 Sale of licences 1.3 Foreign exchange rates –14.1 Contract manufacturing –2.2 Other1) 10.8 Revenue 2025 357.3 Change, % –11 1) Including used cars, one-time sale of subscription car portfolios, emission credits as well as parts and accessories. Items affecting comparability, SEKbn 2025 2024 Impairment charge for the EX90 and ES90 platform –11.4 — Restructuring costs –0.8 — Impairment of JV-shareholding in NOVO Energy AB — –1.7 Total –12.2 –1.7 Changes to Operating income, SEKbn Full year EBIT 2024 22.3 Volume –7.9 Sales mix and pricing –9.4 Sale of licences 1.2 Foreign exchange rates –1.7 Share of income in JVs and associates 2) 3.7 Items affecting comparability –10.5 Other3) 2.6 EBIT 2025 0.3 Change, % –99 2) Positive change mainly due to unrecognised share of Polestar losses. 3) Includes personnel and material cost efficiencies, emission credits, change in capitalised expenses, parts and accessories as well as depreciation and amortisation. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / CONSOLIDATED FINANCIAL STATEMENTS 64 ===== SIDA 65 ===== SEKm 2025 2024 Net income –2,968 15,934 Other comprehensive income Items that will not be reclassified subsequently to income statement: Remeasurements of provisions for post-employment benefits 2,403 –312 Tax on items that will not be reclassified to income statement –496 55 Items that have been or may be reclassified subsequently to income statement: Translation difference on foreign operations –4,646 965 Translation difference of hedge instruments of net investments in foreign operations 749 –316 Change in fair value of cash flow hedge related to currency and commodity price risks 8,591 –5,383 Tax on items that have been or may be reclassified to income statement –1,924 1,174 Other comprehensive income, net of income tax 4,677 –3,817 Total comprehensive income 1,709 12,117 Total comprehensive income attributable to Owners of the parent company 5,397 11,285 Non–controlling interests –3,688 832 1,709 12,117 Consolidated Comprehensive Income OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / CONSOLIDATED FINANCIAL STATEMENTS 65 ===== SIDA 66 ===== SEKm Note 31 Dec 2025 31 Dec 2024 ASSETS Non-current assets Intangible assets 15 82,965 83,781 Tangible assets 7, 16 99,391 107,124 Investments in joint ventures and associates 12 7,003 8,998 Other long-term securities holdings 19 10,454 12,753 Deferred tax assets1) 13 8,363 12,260 Other non-current interest-bearing receivables 19 1,235 1,440 Non-current derivative assets 19 1,743 283 Other non-current assets1) 18 4,217 2,984 Total non-current assets 215,371 229,623 Current assets Inventories 17 59,024 62,455 Accounts receivable 4, 18 21,241 22,780 Current tax assets 1,284 1,854 Current derivative assets 19 4,923 485 Other current assets 18 13,764 14,665 Marketable securities 20 1 — Cash and cash equivalents 20 57,564 56,373 Total current assets 157,801 158,612 TOTAL ASSETS 373,172 388,235 Consolidated Balance Sheets SEKm Note 31 Dec 2025 31 Dec 2024 EQUITY & LIABILITIES Equity 21 Equity attributable to owners of the parent company 147,079 137,461 Non-controlling interests 1,299 4,738 Total equity 148,378 142,199 Non-current liabilities Provisions for post-employment benefits 22 5,853 8,111 Deferred tax liabilities 13 9,864 11,080 Other non-current provisions 23 8,528 9,501 Liabilities to credit institutions 19 6,723 3,885 Non-current bonds 19 21,645 18,826 Non-current contract liabilities to customers 2 8,605 10,755 Other non-current interest-bearing liabilities 7, 19 5,355 7,745 Non-current derivative liabilities 19 253 1,252 Other non-current liabilities 4, 24 6,714 5,298 Total non-current liabilities 73,540 76,453 Current liabilities Current provisions 23 8,356 11,379 Liabilities to credit institutions 19 922 1,059 Current bonds 19 1,500 5,723 Current contract liabilities to customers 2 31,264 34,997 Accounts payable 4 57,768 56,479 Current tax liabilities 1,322 1,246 Other current interest-bearing liabilities 7, 19 1,570 2,490 Current derivative liabilities 19 485 2,890 Other current liabilities 24 48,067 53,320 Total current liabilities 151,254 169,583 TOTAL EQUITY & LIABILITIES 373,172 388,235 1) In 2025, Volvo Cars has adjusted the presentation of certain unused tax credits in the US, resulting in a reclassification amounting to SEK 1,099 (1,278) m, to more accurately reflect the nature of these items. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / CONSOLIDATED FINANCIAL STATEMENTS 66 ===== SIDA 67 ===== SEKm Share capital1) Share premium Other contributed capital Currency translation reserve Other reserves Retained earnings Attributable to owners of the parent Non- controlling interests Total Balance at 1 January 2024 61 31,654 8,452 4,092 2,016 80,096 126,371 4,114 130,485 Net income — — — — — 15,401 15,401 533 15,934 Other comprehensive income Remeasurements of provisions for post-employment benefits — — — — — –312 –312 — –312 Translation difference on foreign operations — — — 666 — — 666 299 965 Translation difference of hedge instruments of net investments in foreign operations — — — –316 — — –316 — –316 Change in fair value of cash flow hedge related to currency and commodity price risks — — — — –5,383 — –5,383 — –5,383 Tax attributable to items recognised in other comprehensive income — — — 65 1,109 55 1,229 — 1,229 Other comprehensive income — — — 415 –4,274 –257 –4,116 299 –3,817 Total comprehensive income — — — 415 –4,274 15,144 11,285 832 12,117 Transactions with owners Capital contribution from non-controlling interest2) — — — — — — — 3 3 Divestment of non-controlling interest 2) — — — — — 1 1 –211 –210 Distribution of shares3) –30 — — — — –60 –90 — –90 Bonus issue3) 30 — — — — –30 — — — Acquisition of treasury shares 4) — — — — — –190 –190 — –190 Issue of treasury shares 4) — — — — — 67 67 — 67 Share-based payments4) — — — — — 17 17 — 17 Transactions with owners — — — — — –195 –195 –208 –403 Balance at 31 December 2024 61 31,654 8,452 4,507 –2,258 95,045 137,461 4,738 142,199 Consolidated Statement of Changes in Equity 1) Share capital amounted to SEK 60,947,709. 2) For further information, see Note 21 – Equity and Note 8 – Participation in subsidiaries (Parent company). 3) For further information, see Note 12 – Investments in joint ventures and associates and Note 21 – Equity. 4) For further information, see Note 9 – Share-based remuneration and Note 21 – Equity. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / CONSOLIDATED FINANCIAL STATEMENTS 67 ===== SIDA 68 ===== SEKm Share capital1) Share premium Other contributed capital Currency translation reserve Other reserves Retained earnings Attributable to owners of the parent Non- controlling interests Total Balance at 1 January 2025 61 31,654 8,452 4,507 –2,258 95,045 137,461 4,738 142,199 Net income — — — — — 174 174 –3,142 –2,968 Other comprehensive income Remeasurements of provisions for post-employment benefits — — — — — 2,403 2,403 — 2,403 Translation difference on foreign operations — — — –4,100 — — –4,100 –546 –4,646 Translation difference of hedge instruments of net investments in foreign operations — — — 749 — — 749 — 749 Change in fair value of cash flow hedge related to currency and commodity price risks — — — — 8,591 — 8,591 — 8,591 Tax attributable to items recognised in other comprehensive income — — — –154 –1,770 – 496 –2,420 — –2,420 Other comprehensive income — — — –3,505 6,821 1,907 5,223 –546 4,677 Total comprehensive income — — — –3,505 6,821 2,081 5,397 –3,688 1,709 Transactions with owners Divestment of non-controlling interest 2) — — — — — –289 –289 249 –40 Divestment of joint venture under common control3) — — — — — 4,656 4,656 — 4,656 Distribution of shares — — — — — 3 3 — 3 Acquisition of treasury shares 4) — — — — — –219 –219 — –219 Issue of treasury shares 4) — — — — — 126 126 — 126 Share-based payments4) — — — — — –56 –56 — –56 Transactions with owners — — — — — 4,221 4,221 249 4,470 Balance at 31 December 2025 61 31,654 8,452 1,002 4,563 101,347 147,079 1,299 148,378 1) Share capital amounted to SEK 60,947,709. 2) For further information, see Note 21 – Equity, Note 27 - Business combinations and divestments and Note 8 – Participation in subsidiaries (Parent company). 3) For further information, see Note 4 – Related party transactions and Note 12 – Investments in joint ventures and associates. 4) For further information, see Note 9 – Share-based remuneration and Note 21 – Equity. Consolidated Statement of Changes in Equity Equity Total equity increased to SEK 148.4 (142.2) bn, resulting in an equity ratio of 39.8 (36.6) per cent. The change is mainly attributable to divestment under common control (Lynk & Co) of SEK 4.6 bn, as well as a positive effect in other comprehensive income of SEK 4.7 bn. The increase was offset by a net loss amounting to SEK –3.0 bn. The change in other comprehensive income is related to a foreign exchange translation effect, including hedges of net investments in foreign operations of SEK –4.0 bn (net of tax). Remeasurements of provisions for post-employment benefits had an effect of SEK 1.9 bn (net of tax). The change in fair value of cash flow hedge reserve related to currency and commodity price risks had a positive effect of SEK 6.8 bn (net of tax). The change in value of cash flow hedges is mainly due to positive effects from increased prices of raw materials and appreciated SEK compared to most of the major currencies. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / CONSOLIDATED FINANCIAL STATEMENTS 68 ===== SIDA 69 ===== Consolidated Statement of Cash Flows SEKm Note 2025 2024 OPERATING ACTIVITIES Operating income 303 22,318 Depreciation and amortisation of non-current assets 15, 16 23,945 22,730 Dividends received from joint ventures and associates 205 213 Interest and similar items received 1,929 2,190 Interest and similar items paid –1,538 –1,623 Other financial items –1,963 –836 Income tax paid –3,724 –4,448 Adjustments for other non-cash items 26 6,281 2,754 25,438 43,298 Movements in working capital Change in inventories 2,353 –2,757 Change in accounts receivable –84 –1,386 Change in accounts payable 7,205 –7,539 Change in provisions –1,867 –1,905 Change in contract liabilities to customers 644 8,709 Change in other working capital 936 8,952 Cash flow from movements in working capital 9,187 4,074 Cash flow from operating activities 34,625 47,372 INVESTING ACTIVITIES Investments in shares and participations 27 280 –1,901 Divestment in shares and participations 12, 27 7,716 –217 Loans to affiliated companies1) –2,727 –75 Repayment of loans from affiliated companies 2) 1,688 — Investments in intangible assets –17,252 –19,774 Investments in tangible assets –22,825 –25,259 Disposal of tangible assets 872 981 Other 72 — Cash flow from investing activities –32,176 –46,245 Cash flow from operating and investing activities 2,449 1,127 SEKm Note 2025 2024 FINANCING ACTIVITIES Proceeds from credit institutions 4,947 199 Proceeds from bond issuance 19 5,476 5,857 Acquisition of treasury shares –219 –190 Repayment of bond –5,732 –6,936 Repayment of liabilities to credit institutions –1,631 –862 Repayment of interest-bearing liabilities –2,108 –2,053 Matured marketable securities 20 –1 10,269 Other 996 –368 Cash flow from financing activities 1,728 5,916 Cash flow for the year 4,177 7,043 Cash and cash equivalents at beginning of year 56,373 47 861 Exchange difference on cash and cash equivalents –2,986 1,469 Cash and cash equivalents at end of year 20 57,564 56,373 1) In the second quarter 2025, Volvo Cars made a payment under the financial guarantee arrangement described in Note 25 – Contingent liabilities and pledged assets, relating to the loans of a UK entity subject to a purchase option. 2) In the third quarter 2025, Volvo Cars received repayment of a loan in connection with a divestment of a subsidiary. Net financial position and liquidity Total cash and cash equivalents together with marketable securities, amounted to SEK 57.6 (56.4) bn. Net cash was SEK 26.9 (27.1) bn, with the decrease primarily driven by working capital. Liquidity amounted to SEK 80.8 (88.5) bn, which includes undrawn credit facilities of SEK 23.3 (32.2) bn. Cash flow from operating activities was positive, amounting to SEK 34.6 (47.4) bn, and included a one-off impact of SEK 11.4 bn in adjustments for other non-cash items, primarily reflecting a non-cash impairment charge related to the EX90 and ES90 platforms following a reassessment of their lifecycle profitability. The change in working capital amounted to SEK 9.2 (4.1) bn, primarily driven by change in accounts payable SEK 7.2 (–7.5) bn, due to increased production. Cash flow from investing activities amounted to SEK –32.2 (–46.2) bn, mainly driven by investments in tangible and intangible asset. As the major investments in the new product architecture are being finalised, a reduction in investment levels is seen and expected to continue, supported by continued cost conscious - ness. The investing activities were partially offset by the payment from the divestment of the 30 per cent shareholding in Lynk & Co, which amounted to SEK 7.8 bn. Cash flow from financing activities totalled SEK 1.7 (5.9) bn, primarily attributable to the issuance of a new green bond and the drawdown of a credit facility from the European Investment Bank, partially offset by the repayment of an existing bond. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / CONSOLIDATED FINANCIAL STATEMENTS 69 ===== SIDA 70 ===== NOTE 1 GENERAL INFORMATION FOR FINANCIAL REPORTING IN VOLVO CAR GROUP Basis of preparation The consolidated financial statements of Volvo Car AB (publ.) have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), as adopted by the European Union and the Swedish Annual Accounts Act. In addition, RFR 1 Supplementary Rules for Groups has been applied, a standard issued by the Swed - ish Financial Reporting Board. RFR 1 specifies mandatory additions to the IFRS disclosure requirements in accordance with the Swedish Annual Accounts Act. Group companies apply the same accounting policies, irrespective of national legislation, as defined in Volvo Car Group accounting directives and they have been applied consist - ently for all periods, unless otherwise stated. The financial statements are based on cost, apart from certain financial instruments, provisions for pensions and other post-em - ployment benefits which are reported at fair value. Preparation of the financial statements in accordance with IFRS requires the Com - pany’s Executive Management and the Board of Directors to make estimations and judgements that affect the value of the reported assets, liabilities, income and expenses. Estimates and judgements will impact the values of assets and liabilities. The actual outcome (value) may differ from these estimates and judgements and correc - tions may be necessary to make. Therefore, the estimates and judgements are reviewed on a regular basis. All accounting policies and critical accounting estimates and judgements considered material to Volvo Car Group are described in conjunction with each note. When a new accounting policy has been implemented or when there has been changes in disclosures this is described as part of the relevant note. In order to avoid duplication of information, cross-references have been made between different parts of the annual report. action failure and fulfilment of the Paris Agreement. Volvo Cars continuously evaluates how climate change transitional and physical risks affects our business strategy and operations as sustainability is deeply integrated in our business model. In preparing the consolidated financial statements, the potential impact of climate change has been considered when developing the critical accounting estimates and judgements used by management. The financial impact relating to climate change occurs gradually as Volvo Car Group navigates the transition to electrification in line with its strategic ambitions and has not had a material effect on the financial statements as of 31 December 2025. The table included in this note identifies disclosures where considerations of climate related risks are further described, if applicable. Foreign currency The Group’s Consolidated Financial Statements are presented in Swedish Krona (SEK), which is also the Parent Company’s functional currency. Assets and liabilities denominated in foreign currencies other than the functional currency are translated to the functional currency using the balance sheet closing rate. Exchange rate differ - ences are recognised in the income statement. Exchange rate differences on operating assets and liabilities are recognised in other operating income and expenses, while exchange rate differences arising on financial assets and liabilities are recog - nised in financial income and expenses. When preparing the consolidated financial statements, items in the income statements of foreign subsidiaries are translated to SEK using monthly average exchange rates. Balance sheet items are translated into SEK using exchange rates at year-end (closing rate). Exchange rate differences arising on translation are recognised in other comprehensive income and accumulated in equity. The accu - mulated translation differences related to subsidiaries, joint ven - tures or associates are reversed to the income statement as a part of the gain/loss arising from disposal of such a company. New accounting policies New accounting policies 2025 IASB has published amendments to standards that were endorsed by EU, effective after 1 January 2025. These additions have not had any material impact on the financial statements. New accounting policies 2026 and later IASB has published standards and amendments to standards that were endorsed by EU, effective after 1 January 2026. None of the amendments are expected to have a material effect on the financial statements. The new standard IFRS 18 Presentation and Disclosure in Financial Statements was released in April 2024 and has an effec - tive date 1 January 2027. An impact assessment is currently being performed as to how this new standard will impact the financial statements. Basis of consolidation The consolidated accounts include Volvo Car AB (publ.) and its subsidiaries. Subsidiaries are all entities over which Volvo Car Group has control. Volvo Car Group controls an entity when exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. All wholly-owned subsidiaries and certain companies owned to 50 per cent or more, are consolidated, see Note 8 – Participation in subsidiaries (Parent Company). Subsidiaries are fully consolidated from the date on which control is transferred to Volvo Car Group. They are deconsolidated from the date that control ceases. When a subsidiary is not wholly-owned by Volvo Car Group, the portion of the results and equity attributable to the non-controlling interest are presented separately in the financial statements. Climate change Being an automotive industry actor, Volvo Cars acknowledges the global threat of climate change and global warming, together with the importance of our own contribution to prevent global climate Notes to the Consolidated Financial Statements All amounts are in SEKm unless otherwise stated. Amounts in brackets refer to the preceding year. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 70 ===== SIDA 71 ===== The main exchange rates applied are presented in the table below: Average rate Close rate Country Currency 2025 2024 2025 2024 China CNY 1.34 1.47 1.32 1.51 Euro zone EUR 10.97 11.42 10.82 11.45 United Kingdom GBP 12.53 13.46 12.39 13.82 United States USD 9.48 10.51 9.22 11.03 Japan JPY 0.06 0.07 0.06 0.07 Classification of current and non-current assets and liabilities An asset is classified as current when it is held primarily for the pur - pose of trading, is expected to be realised within 12 months after the balance sheet date or consists of cash or cash equivalents, provided it is not subject to any restrictions. All other assets are classified as non-current. A liability is classified as current when it is held primar - ily for the purpose of trading or is expected to be settled within 12 months after the balance sheet date and Volvo Car Group do not have the right to defer settlement of the liability for at least 12 months after the balance sheet date. All other liabilities are classi - fied as non-current. When the criteria for being classified as a non-current asset held for sale are fulfilled and the asset or disposal group are of material value, the asset or disposal group and the related liabilities are recognised on a separate line on the balance sheet. Note Critical accounting estimates and judgements Climate consider ations Note 1 – General information for financial reporting in Volvo Car Group Note 2 – Net revenue Sales with residual value commitments, repurchase commitments and variable sales prices Note 7 – Leases Lease term and discount rate Note 10 – Government grants Assessment of reasonable assurance in complying with grant terms Note 12 – Investments in joint ventures and associates Joint control and significant influence assessments Note 13 – Taxes Recoverability of deferred tax assets Note 15 – Intangible assets Impairment testing of intangible assets, useful life Note 16 – Tangible assets Impairment testing of tangible assets, useful life Note 17 – Inventories Write down of inventories Note 19 – Financial instruments and financial risks Valuation of level 3 instruments Note 22 – Post employment benefits Assumptions in calculating benefit obligations Note 23 – Current and other non–current provisions Assumptions used in calculating product warranty, legal claims, etc. Note 25 – Contingent liabilities and pledged assets Assumptions regarding legal and supplier claims, volume commitments Note 27 – Business combinations and divestments Assessment of if a transaction is a common control transaction Note 28 – Segment Reporting Judgements regarding operating segments Climate considerations are generally incorporated in the notes under the Critical accounting estimates and judgments section, apart from Note 19 – Financial instruments and financial risks, where they are addressed under Refinancing Risk Management Status at Year End , and Note 1 – General information for financial reporting in Volvo Car Group, where they appear under the Climate change heading. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 71 ===== SIDA 72 ===== estimated residual value to be paid in the future. This value is recog - nised as a contract liability. For the sale of cars where a repurchase commitment (right or obligation to repurchase) is issued to the customer as part of the sales contract, revenue is recognised over the contract period as if it were an operating lease contract due to the customer not obtaining control of the car at the point of sale. The deferred revenue, equal to the transaction price less sales taxes less the repurchase commit - ment, is recognised as contract liabilities and the repurchase com - mitment, equal to the repurchase price, as other liabilities. The car is recognised on the balance sheet as a tangible asset under operating lease over the contract period and is depreciated to the estimated residual value. The useful life and residual value of the assets are monitored closely and changed if necessary. For further information regarding operating leases see Note 7 – Leases. Revenue from sale of services Volvo Car Group sells services in the form of maintenance con - tracts, extended warranties, connectivity, and in-car software to customers. Revenue from these services is generally recognised over the contract period on a straight-line basis. When an extended warranty contract is bundled with the sale of a car and the inclusion in the contract is assessed to be common practice in the market, a provision is recognised at the point of sale for the costs. When the inclusion goes beyond common practice in the market, part of the revenue is deferred as a contract liability and recognised over the contract period. The revenue deferred is based on stand-alone selling prices, or if not observable, estimated based on the expected cost plus a margin approach. Maintenance and extended warranty contracts can in some cases meet the definitions of both a customer contract and an insurance contract. Considering the terms of these contracts, Volvo Car Group applies the policy choice available to account for these as customer contracts and applies the accounting policies described in this note. Emission credits Volvo Car Group recognises income from government grants relat - ing to emission credits earned during the period for exceeding the emission targets related to car production in certain markets. A fair value for credits received is calculated when Volvo Car Group deter - mines that an active market for the credit exists and that the Group is likely to engage in transactions in that credit market. Revenue is recognised or adjusted according to net realisable value principles as the credits are classified as inventories. The earned credits are classified as inventories until they are either sold and transferred to a third-party or consumed in Volvo Car Group’s operations. When credits are sold and transferred that either did not have a determi - nable fair value as of their grant date or were sold at a value that exceeds the fair value on the grant date, this gain is recognised, on a net basis, in revenue when the credits are transferred to the customer and derecognised from inventory. For more information see Note 10 – Government grants and Note 17 – Inventories. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Variable revenue components An inherent risk regarding different forms of variable revenue components in a sales contract, is the probability of a reversal of revenue in future periods. On initial recognition, variable revenue components are estimated, and revenue is recognised when it is highly probable that a revenue reversal in future periods will not occur. An example of this is when cars are sold to a retailer with volume discounts based on aggregate sales over a 3–12 months period. Revenue from these sales is recognised based on the price specified in the sales contract, adjusted for volume discounts for the wholesale period. Estimates and judgements initially made are updated continuously at each reporting period. Residual value guarantees Volvo Car Group is exposed to residual value risk, meaning that there is a potential loss for Volvo Car Group if the future market value of a used car is lower than the guaranteed value of the car according to the sales contract. This potential negative effect is recognised as a contract liability, and the future market value of cars is monitored individually on a continuing basis. An estimate is made based on evaluating, among other things, recent car auction values, future price deterioration due to expected change of market condi - tions and production planning, vehicle quality data, repair and reconditioning costs and with consideration given to the specific markets demand for internal combustion engines and electric vehi - cles as customer purchasing decisions are influenced by climate change factors. NOTE 2 REVENUE ACCOUNTING POLICIES Revenue from the sale of goods and services is valued at transaction price less sales taxes and is recognised when control of the deliv - ered good or service is transferred to the customer. Control passes to the customer generally when they can direct the use of and obtain the benefits from the good or service. This passing of control can happen at a point in time or over a period of time and revenue recognition follows this. For bundled sales contracts which include both a car and services where the customer can benefit from these independently of each other, the transaction price of the car is reduced by allocating a transaction price to the services based on stand-alone selling prices, or an estimate thereof based on the expected cost plus a margin approach. Sales contracts may include variable revenue components, such as volume discounts, incentive programmes, and other discounts that are paid out at a later date. When revenue is recognised from these transactions, it is adjusted by the estimated value of the varia - ble components, which is recognised as a contract liability. For sales contracts where Volvo Car Group has an obligation to transfer goods or services to the customer and has received consid - eration in advance, or an amount of consideration is due from the customer, a contract liability is recognised. Revenue is then recog - nised, and the contract liability derecognised when the good or service is transferred to the customer. This applies to sales con - tracts with residual value guarantees, sales related to extended service business, sales with repurchase commitment, and advance payments from customers. The contract liability is derecognised against cash and cash equivalents when it pays out or settles sales generated obligations such as a discount. Revenue from sale of goods Revenue recognition for sale of new and used cars, parts and acces - sories as well as sale of goods that are part of contract manufactur - ing arrangements, depends on specific contract terms, but generally is at a point in time around when the customer takes physical possession. For the sale of cars where a residual value guarantee is issued to an independent financing provider as part of the sales contract, revenue recognised is reduced by the amount corresponding to the OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 72 ===== SIDA 73 ===== Contract liabilities where revenue is deferred and recognised over time: Sales generated obligations Residual value guarantees Deferred revenue – extended service business Deferred revenue – sale with repurchase commitment Advance payments from customers Total Balance at 1 January 2024 21,703 3,942 9,447 2,004 1,869 38,965 Provided for during the year 67,938 2,891 13,582 6,584 99,339 190,334 Utilised during the year –67,004 –2,454 –12,557 –5,351 –98,102 –185,468 Translation differences 1,091 277 378 88 87 1,921 Balance at 31 December 2024 23,728 4,656 10,850 3,325 3,193 45,752 Of which current 23,728 1,476 4,475 2,819 2,499 34,997 Of which non-current — 3,180 6,375 506 694 10,755 Balance at 1 January 2025 23,728 4,656 10,850 3,325 3,193 45,752 Provided for during the year 66,176 4,657 10,929 5,659 116,969 204,390 Utilised during the year –68,182 –4,251 –10,774 –5,754 –116,620 –205,581 Translation differences –2,497 –616 –1,170 –179 –230 –4,692 Balance at 31 December 2025 19,225 4,446 9,835 3,051 3,312 39,869 Of which current 19,225 2,078 4,080 2,572 3,309 31,264 Of which non-current — 2,368 5,755 479 3 8,605 Timing of revenue recognition 2025 2024 At the point of delivery 345,635 388,210 Over the contract term 11,628 12,024 Total 357,263 400,234 Repurchase commitments Volvo Car Group is exposed to a potential loss on sales with repur - chase commitments if the estimated value of the car guaranteed in the contract is greater than the market value at the time of repur - chase. The potential negative effect is recognised as an increased depreciation or an impairment of the car. Estimates of the car value are made on a continuous basis, based on evaluating, among other things, recent car auction values, future price deterioration due to expected change of market conditions and production planning, vehicle quality data, repair and reconditioning costs and with consideration given to the specific markets demand for internal combustion engines and electric vehicles as customer purchasing decisions are influenced by climate change factors. The value of the car on the balance sheet is adjusted if necessary. Revenue allocated to geographical regions: 2025 2024 Europe 193,593 208,914  of which Sweden 1) 39,555 48,096  of which United Kingdom 35,213 30,438  of which Germany 33,334 30,795 US 64,043 69,496 China 49,304 63,682 Other markets 50,323 58,142  of which Türkiye 7,847 8,051  of which Canada 6,793 6,659 Total 357,263 400,234 1) Includes the Contract manufacturing sales channel. Revenue allocated to category: 2025 2024 Sales of new cars 250,468 303,880 Sales of used cars 32,509 27,747 Sales of parts and accessories 38,835 38,497 Revenue from subscription, leasing and rental business 5,675 6,709 Sales of licences and royalties 1,936 647 Contract manufacturing 10,249 13,151 Emissions credits 3,501 994 Other revenue 2) 14,090 8,609 Total 357,263 400,234 2) Includes one-time sale of subscription car portfolios amounting to SEK 5,245 (2,741) m. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 73 ===== SIDA 74 ===== Significant events and agreements with related parties during the reporting period • On 14 February 2025, Volvo Cars divested its 30 per cent share - holding in Lynk & Co Automotive Technology Co., Ltd to Zhejiang Zeekr Intelligent Technology Co., Ltd., after approval at an Extraordinary General Meeting of Volvo Cars’ shareholders on 6 February as well as other regulatory approvals. Cash considera - tion, including interest, amounted to RMB 5,463 m. The capital gain, recognised directly in equity due to divestment under com - mon control, amounted to RMB 3,144 m (SEK 4,656 m), including tax cost relating to the transaction which amounts to RMB 803 m. • In May, Volvo Cars sold a significant number of the owned sub - scription cars in the UK to Volvo Car Financial Services UK Ltd. The one-time transaction amounted to a revenue of SEK 3,288 m, with limited effect on profit. The transaction is part of the updated commercial strategy. Transactions with related parties Significant transactions with related parties and the nature of these are specified in the below tables and text. Sales of goods, services and other 2025 2024 Related parties 1)2) 15,792 17,918  of which Polestar Automotive Holding UK Group 13,730 15,402  of which Ningbo Fuhong Auto Sales Co., Ltd 571 1,783 Joint ventures and associated companies 13,121 11,821  of which Volvo Car Financial Services UK Ltd 11,276 7,686 Purchases of goods, services and other 2025 2024 Related parties 1)2) –37,095 –54,451  of which Aurobay Sweden AB (prior name  Powertrain Engineering Sweden AB) –11,561 –13,125  of which Zhangjiakou Geely New Energy  Automobile Co., Ltd –9,089 —  of which Viridi E-Mobility Technology (Ningbo)  Co., Ltd –3,360 –1,481  of which Zhejiang Geely Automobile Co.,Ltd –3,270 –28,497  of which Zhangjiakou Aurobay Powertrain  Manufacturing Co., Ltd –3,110 –3,933  of which Geely Changxing Automatic  Transmission Co., Ltd –1,745 –1,795  of which Zhejiang Haoqing Automobile  Manufacturing Co., Ltd –328 –1,995 Joint ventures and associated companies –1,188 –2,262 Receivables 3) Payables 3) 31 Dec 2025 31 Dec 2024 31 Dec 2025 31 Dec 2024 Related parties 1)2) 21,091 23,077 12,344 12,679 Joint ventures and associated companies 1) 1,390 1,801 86 716 1) Related parties refer to entities that belong to the Geely sphere of companies. Joint ventures and associated companies within the Geely sphere are presented as Related parties. For joint ventures and associated companies see Note 12 – Investments in joint ventures and associates. 2) Including contract manufacturing. 3) Non-current part of receivables amounts to SEK 10,800 (13,120) m. Non-current part of payables amounts to SEK 1 (1) m. The Polestar Automotive Holding UK Group The revenue from the Polestar Automotive Holding UK Group mainly relate to sales of Polestar cars from the Taizhou and Charleston plants, technology licences and development of technology as well as revenue related to sales of other services. Ningbo Fuhong Auto Sales Co., Ltd The revenue from Ningbo Fuhong Auto Sales Co., Ltd mainly relate to sales of cars. NOTE 3 EXPENSES BY NATURE 2025 2024 Material cost incl. freight, distribution and warranty –248,108 –273,852 Personnel 1) –41,627 –44,985 Amortisation/depreciation –23,945 –22,730 Other –43,118 –33,684 Total –356,798 –375,251 1) The amounts presented as Personnel have been reduced by capital - ised salary costs related to product development. Depreciation and amortisation according to plan by function: 2025 2024 Cost of sales –10,984 –11,369 Research and development expenses –10,236 –8,905 Selling expenses –1,599 –1,541 Administrative expenses –1,095 –884 Other income and expense –31 –31 Total –23,945 –22,730 NOTE 4 RELATED PARTY TRANSACTIONS ACCOUNTING POLICIES Volvo Car Group has a close collaboration with its related parties. The main part of the transactions is related to sales and purchases of cars, licences of technology and purchases of components. Related parties include companies outside the Volvo Car Group, but within the Geely sphere of companies as well as other companies, such as joint ventures and associates. All transactions with related parties are performed at arm’s length. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 74 ===== SIDA 75 ===== NOTE 5 AUDIT FEES 2025 2024 Deloitte Audit fees –60 –64 Audit-related fees –7 –6 Tax services –2 –3 Other services –10 –8 Total –79 –81 Audit fees involve audit of the Annual Report, interim report and the administration by the Board of Directors and the Managing Directors. The audit also includes advice and assistance as a result of the observations made in connection with the audit. Audit-related fees refer to other assignments to ensure quality in the financial statements including consultations on reporting requirements and internal control. Tax services include tax-related advisory. All other work performed by the auditor is defined as other services . NOTE 6 OTHER OPERATING INCOME AND EXPENSES ACCOUNTING POLICIES Foreign exchange rate gains and losses on operating transactions are presented net in other operating income and expenses. Also presented net are fluctuations in the fair value of derivatives hedg - ing operating transactions where there is ineffectiveness on hedging relationships relating to the operating transaction. Information of the classification of financial instruments, see Note 19 – Financial instruments and Financial risks. 2025 2024 Other operating income Net foreign exchange rate differences — 403  of which foreign exchange rate gains — 2,577  of which foreign exchange rate losses — –2,174 Net change in fair value on financial instruments 207 — Sold services 521 684 Government grants 26 30 Other 976 2,321 Total 1,730 3,438 2025 2024 Other operating expenses Amortisation and depreciation of intangible and tangible assets –31 –31 Net foreign exchange rate differences –1,571 —  of which foreign exchange rate gains 3,278 —  of which foreign exchange rate losses –4,849 — Net change in fair value on financial instruments — –72 Property tax –189 –155 Other –755 –1,123 Total –2,546 –1,381 Volvo Car Financial Services UK Ltd The revenue from Volvo Car Financial Services UK Ltd mainly relate to sales of cars. Aurobay Sweden AB The purchases from Aurobay Sweden AB (prior name Powertrain Engineering Sweden AB) are mainly related to combustion engines and product development. Zhangjiakou Geely New Energy Automobile Co., Ltd The purchases from Zhangjiakou Geely New Energy Automobile Co., Ltd are mainly related to EX30. Zhejiang Geely Automobile Co.,Ltd The purchases from Zhejiang Geely Automobile Co.,Ltd are mainly related to EX30. Zhangjiakou Aurobay Powertrain Manufacturing Co., Ltd The purchases from Zhangjiakou Aurobay Powertrain Manufactur - ing Co., Ltd are mainly related to combustion engines. Viridi E-Mobility Technology (Ningbo) Co., Ltd The purchases from Viridi E-Mobility Technology (Ningbo) Co., Ltd are mainly related to batteries. Geely Changxing Automatic Transmissions Co., Ltd The purchases from Geely Changxing Automatic Transmission Co., Ltd are mainly related to gearboxes. Zhejiang Haoqing Automobile Manufacturing Co., Ltd The purchases from Zhejiang Haoqing Automobile Manufacturing Co., Ltd are mainly related to EM90 and EX30. Volvo Car Group does not engage in any transactions with Board members or senior executives except ordinary remunerations for services and the share-based programme as described in Note 8 – Employees and remuneration and Note 9 – Share-based remuneration. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 75 ===== SIDA 76 ===== ance sheet at cost less accumulated depreciation and impairment and classified as Assets under operating lease (see Note 16 – Tangi - ble assets). For subscription contracts, lease income is recognised as revenue on a straight-line basis over the lease term. For repur - chase commitment contracts, deferred revenue is recognised as Contract liabilities to customers, see Note 2 - Revenue, at the time the vehicle is sold (equal to the sales price received from the cus- tomer less the agreed repurchase value that Volvo Car Group is contractually obligated to pay in the future) and recognised as reve - nue on a straight-line basis until repurchase date. In addition to this, a liability is recognised for the agreed repurchase value to be paid at repurchase date. see Note 24 – Other Current and Non-Current Liabilities. Sale and leaseback transactions From time to time, Volvo Car Group sells a tangible asset (primarily owned cars and buildings) and immediately reacquires the right to use the asset by entering into a lease with the buyer. The leaseback period can range from three months to three years. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS At lease contract commencement date, Volvo Car Group is required to make judgements as a lessee which affect the measurement of its RoU asset and lease liability. When determining the lease term, Volvo Car Group considers all facts and circumstances that create an economic incentive to exer - cise an extension option, or not to exercise a termination option in addition to the non-cancellable lease term. These options are added to the lease term if they are reasonably certain. For example, Volvo Car Group would consider it reasonably certain to exercise an extension option if investments have been made to improve the underlying asset or tailor it for our special needs, and/or if the underlying asset is of importance to Volvo Car Group’s operations. The assessment is reviewed if a significant event or change in circumstances occurs that may affect the initial assessment. Volvo Car Group incremental borrowing rate is the weighted average effective interest rate of all borrowings, and takes into consideration for example credit risk, currency risk, country risk and lease term. For sale and leaseback transactions, Volvo Car Group is required to make judgements about whether the transfer of an asset to the buyer qualifies as a sale under IFRS 15 which then determines the accounting treatment for the transaction. Volvo Car Group deter - mines whether a sale exists by making judgements of whether con - trol of the asset passes to the buyer and applies the same account - ing principles to this judgement as discussed in Note 2 – Revenue. If the transfer does not qualify as a sale and the assets in the trans - action involve owned cars, the transfer proceeds received from the buyer are recognised on the balance sheet, split between Inter - est-bearing liabilities (equal to the present value of future lease payments, see Note 19 - Financial Instruments and Financial Risks) and Contract liabilities from customers (equal to deferred revenue recognised at the end of the lease period relating to the car sale, see Note 2 – Revenue). For some assets, Volvo Car Group makes an esti - mate of the leaseback period which impacts the value of each com - ponent. This estimate is based on historical asset usage patterns. Volvo Car Group as lessee Amounts recognised in income statement 2025 2024 Depreciation expenses on right-of-use assets –1,636 –2,070 Interest expense on lease liabilities –214 –406 Expense relating to short-term leases –455 –369 Expense relating to leases of low value assets –63 –55 Expense relating to variable lease payments not included in the measurement of the lease liability –109 –133 Income from sub-leasing right-of-use assets 90 121 The total cash outflow for leases amounts to SEK 2,387 (2,912) m. The amount includes payments for lease agreements recognised as liabilities, variable payments, short-term payments and payments for leases of low value. NOTE 7 LEASES ACCOUNTING POLICIES Volvo Car Group as a lessee Volvo Car Group leases primarily real estate assets (such as office buildings and warehouses) and equipment (such as production tool - ing and IT hardware). At lease contract commencement date, Volvo Car Group recog - nises on the balance sheet a right-of-use (RoU) asset and lease lia - bility. RoU assets are measured at cost less accumulated deprecia - tion and impairment and classified as Tangible assets on the balance sheet, see Note 16 – Tangible assets. Lease liabilities are measured as the present value of future lease payments and amortised using the interest rate implicit in the lease or using Volvo Car Group’s incremental borrowing rate when this cannot be determined. Inter - est expense on Lease liabilities is presented as interest expense in the income statement. Volvo Car Group has elected not to separate non-lease compo - nents and accounts for the lease and non-lease components as a single lease component. If a lease contract has a term of 12 months or less, or the under - lying asset is of low value, or includes variable lease payments not dependent on an index or rate, no RoU asset or lease liability is recognised. The cost of these leases is recognised as a lease expense on a straight-line basis over the lease term in the functional expense line for which the leased asset is used. Volvo Car Group as a lessor Volvo Car Group classifies a lessor contract as either a finance lease or an operating lease. If substantially all the risks and rewards inci - dental to ownership of the leased asset are transferred to the les - see, it is classified as a finance lease. If substantially all the risks and rewards remain with Volvo Car Group, it is classified as an operating lease. Operating leases Volvo Car Group’s operating leases consist primarily of cars under a subscription contract with a customer (Care by Volvo) and cars sold with a repurchase commitment (for example to financial institutions and rental fleet companies). These cars are recognised on the bal - OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 76 ===== SIDA 77 ===== Lease liabilities 2025 2024 Non-current lease liabilities 5,309 7,523 Current lease liabilities 1,562 2,176 Accrued Interest expenses on lease liabilities 20 103 The maturity analysis of lease liabilities is presented as other cur - rent and non-current interest-bearing liabilities respectively in Note 19 – Financial instruments and Financial Risks. Volvo Car Group as lessor Operating lease contracts The table contains a maturity analysis of lease payments and the total of undiscounted lease payments that will be received after the balance sheet date. Future lease income of operating lease contracts, undiscounted 2025 2024 No later than 1 year 1,803 2,577 Later than 1 year but no later than 2 years 520 1,009 Later than 2 year but no later than 3 years 36 173 Later than 3 year but no later than 4 years 17 53 Later than 4 year but no later than 5 years 17 20 Later than 5 years 19 43 Total 2,412 3,875 NOTE 8 EMPLOYEES AND REMUNERATION ACCOUNTING POLICIES Incentive programmes Volvo Car Group manages a total of four different global incentive programmes, whereof two are short-term and two are long-term. Short-term • The Short-Term Variable Pay Programme for Senior Leaders (STVP for Senior Leaders) • The Volvo Bonus programme Long-term • The Performance share programme (PSP) • The Employee share matching programme (ESMP) The design and pay-out of all programmes are subject to approval by the Board of Directors. The share-based programmes are subject to decision by the Annual General Meeting. Short-term incentive programmes For the short-term incentive programmes a liability is recognised if all prerequisites are met and the cost is recognised as an operating expense. Long-term incentive programmes For information on share-based programmes, see Note 9 – Share- based remuneration. Restructuring Volvo Car Group from time-to-time engage in restructuring pro - grammes to reduce cost and drive efficiencies. Such programmes may involve a redundancy of employees. When a detailed and formal plan of restructuring has been publicly announced, the amounts of provision are determined based on the total direct expenditure arising from the restructuring when the recognition criteria for provisions are met, see Note 23 – Current and other non-current provisions. Right-of-use asset Buildings and land Machinery and equipment Total Acquisition cost Balance at 1 January 2024 11,876 673 12,549 Additions 2,354 2,863 5,217 Acquired through business combinations 8 — 8 Divestments and disposals –1,321 –173 –1,494 Reclassifications –2 — –2 Translation differences 367 40 407 Balance at 31 December 2024 13,282 3,403 16,685 Additions 1,385 710 2,095 Divestment of business –8 — –8 Divestments and disposals –513 –2,578 –3,091 Reclassifications 10 –10 — Translation differences –960 –440 –1,400 Balance at 31 December 2025 13,196 1,085 14,281 Right-of-use asset Buildings and land Machinery and equipment Total Accumulated depreciation Balance at 1 January 2024 –4,983 –444 –5,427 Depreciation expense –1,547 –523 –2,070 Divestments and disposals 1,179 213 1,392 Reclassifications 3 — 3 Translation differences –105 –9 –114 Balance at 31 December 2024 –5,453 –763 –6,216 Depreciation expense –1,717 81 –1,636 Divestment of business 7 — 7 Divestments and disposals 398 354 752 Reclassifications –4 4 — Translation differences 381 70 451 Balance at 31 December 2025 –6,388 –254 –6,642 Net balance at 31 December 2024 7,829 2,640 10,469 Net balance at 31 December 2025 6,808 831 7,639 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 77 ===== SIDA 78 ===== 2025 2024 Salaries and other remuneration to the Board3), CEO, Executive Management Team (EMT)4) and other employees Wages and salaries, other remune- rations (of which variable salaries) Social security expenses (of which pension expenses) Wages and salaries, other remune- rations (of which variable salaries) Social security expenses (of which pension expenses) Board, Chief Execu - tive Officers and EMT 297 (52) 110 (40) 324 (90) 124 (39) Other employees 27,409 11,240 (5,647) 28,641 10,658 (5,274) Total 27,706 (52) 11,350 (5,687) 28,965 (90) 10,782 (5,313) 1) The FTE number in 2025 and 2024 reflects temporary layoffs. 2) Senior executives are defined as key personnel within the subsidiaries. 3) The Board includes all Board members in the subsidiaries within Volvo Car Group. 4) The Executive Management Team (EMT) consists of the CEO in Volvo Car AB (publ.) and Volvo Car Corporation and key management personnel other than Board members, in total 8 (8). Compensation to Board members The shareholders have elected a Nomination Committee, which on a yearly basis proposes appropriate remuneration principles and remuneration for Volvo Cars Board. The remuneration to the mem - bers of the Board is determined at the Annual General Meeting or at an Extraordinary General Meeting when new Board members are elected. At the Annual General Meeting 2025 it was decided that Board members elected at the meeting who are employed or other - wise remunerated by Volvo Car Group or the Zhejiang Geely Holding Group shall not be entitled to any remuneration. The other Board members elected at the Annual General Meeting shall receive remuneration containing the following elements: (i) a market-based fixed remuneration decided at the Annual General Meeting (ii) a company car in accordance with the Group´s company car policy in force from time to time and (iii) to Board members who are members of any of the Boards’ committees an additional market-based fixed remuneration as decided at the Annual General Meeting. The Extraordinary General Meeting held on 8 December 2025 resolved that the new Board members elected at the Extraordinary General Meeting shall receive remuneration in accordance with the remu - neration levels as resolved by the Annual General Meeting 2025. Expensed remuneration to the individual Board members is specified below: Board member 2025 Ordinary compensa- tion, TSEK 2024 Ordinary compensa- tion, TSEK Eric Li (Li Shufu), Chairperson — — Daniel Li (Li Donghui) — — Lone Fønss Schrøder (until June 2025) 1,655 3,270 Winfried Vahland (until January 2024) — 39 Jonas Samuelson 1,600 1,371 Diarmuid O’Connell 1,345 1,331 Lila Tretikov 1,420 1,402 Anna Mossberg 1,200 1,189 Jim Rowan (until March 2025) — — Håkan Samuelsson (from April 2025) — — Ruby Lu (Rong Lu) 1,420 1,358 Caroline Grégoire-Sainte-Marie (from December 2025) — — Pieter Nota (from December 2025) — — Total 8,640 9,960 Terms of employment and remuneration to the CEO The Board has assigned the People Committee (PC) to determine the remuneration guidelines for the CEO, subject to the sharehold - ers’ meetings approval. The chairperson of the Board shall in dia - logue with PC decide the remuneration to the CEO in accordance with the remuneration guidelines decided by the shareholders meeting. A CEO total remuneration package may consist of a fixed annual base salary, short-term variable cash remuneration (STVP), long-term variable remuneration (PSP) and other benefits such as a company car and insurance. The notice period for a CEO is a maxi - mum of 12 months in case of termination by either Volvo Car Group or the CEO. Furthermore, the CEO is, in case of termination by Volvo Car Group, entitled to severance pay based on the fixed salary, during a period of maximum 12 months. A payment of SEK 10.9 m was paid as a one-time sign-on incen - tive in 2025 to the current CEO. A payment of 860 TSEK was paid as a recognition award in 2025 to the former CEO. The current CEO has a defined contribution pension plan to which Volvo Car Corporation allocates 50 per cent of the fixed monthly salary on a rolling basis. Average number of employees by region 1) 2025 Of whom women,% 2024 Of whom women,% Sweden 22,379 25 21,640 28 Nordic countries other than Sweden 797 35 763 39 Belgium 5,735 14 5,192 15 Europe other than the Nordic countries and Belgium 2,044 32 1,813 39 North and South America 2,801 32 3,347 38 China 7,691 16 8,726 19 Asia other than China 1,087 27 1,005 20 Other countries 116 41 114 37 Total 42,650 23 42,600 26 31 Dec 2025 Of whom women,% 31 Dec 2024 Of whom women,% Number of Board members and senior executives 2) Board members (Chief Executive Officers and senior executives),% Board members (Chief Executive Officers and senior executives),% Parent company 10 (—) 40 (—) 9 (—) 44 (—) Subsidiaries 97 (267) 28 (32) 102 (290) 27 (37) Total 107 (267) 29 (32) 111 (290) 29 (37) 2025 2024 Salaries and other remunerations Wages and salaries, other remune- rations Social security expenses (of which pension expenses) Wages and salaries, other remune- rations Social security expenses (of which pension expenses) Parent company 10 3 (—) 11 3 (—) Subsidiaries 27,696 11,347 (5,687) 28,954 10,779 (5,313) Total 27,706 11,350 (5,687) 28,965 10,782 (5,313) OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 78 ===== SIDA 79 ===== The notice period for a member of EMT is a maximum of 12 months in case of termination by either Volvo Car Group or the member of EMT. Furthermore the member of EMT is, in case of termination by Volvo Car Group, entitled to severance pay based on the fixed salary, during a period of maximum 12 months. During 2025 3 (3) members of EMT left their positions. Remuner - ation during the notice period and severance pay amounted to SEK 41 (21) m, excluding social expenses. Members of EMT are covered by the ITP plan and, where applica - ble, the VMP. On average, the contributions for members of EMT is 28–30 per cent of the pensionable salary. Disability benefits follow the ITP and VMP regulations. Volvo Car Group’s outstanding post-employment benefits obliga - tions to former CEOs and EMT amounted to SEK 36 (34) m. Other long-term benefits Apart from the compensation accounted for under share-based remuneration disclosed in Note 9 – Share-based remuneration, EMT does not have any other long-term benefits. Restructuring In 2025 an accelerated cost and cash action plan was launched with the aim to protect profitability and drive structural efficiencies on direct and indirect costs. Part of the plan involves creating a leaner and more efficient organisation with a lower cost base, and redun - dancies were announced to achieve this. The workforce has during the year been reduced by approximately 2,300 employees globally at a cost of SEK 807 m. In addition, approximately 1,100 consultants and agency personnel were impacted. The carrying value of the restructuring provision as at 31 December 2025 is SEK 326 m, including social expenses, see Note 23 – Current and other non- current provisions. Incentive programmes Short-term incentive programmes Volvo Bonus The Volvo Bonus programme includes all Volvo Car Group employ - ees, except those who participates in the STVP for Senior Leaders. The purpose of the Volvo Bonus is to strengthen global alignment among employees around Volvo Car Group’s vision, objectives and 2025 2024 Expensed compensa - tion to Executive Management Team (EMT), TSEK Salary1) Variable pay2) Long-term variable pay Share-based remunera- tion6) Social security expenses (of which pension expenses) Salary1) Variable pay2) Long-term variable pay Share-based remunera- tion6) Social security expenses (of which pension expenses) Håkan Samuelsson, CEO 15,620 10,900 — 2,276 14,285 (9,320) — — — — — (—) Jim Rowan, former CEO3) 38,393 860 103 113 12,242 (1,517) 16,745 32,987 –128 1,069 24,286 (6,074) Björn Annwall, former Deputy CEO4) — — — — — (—) 20,632 3,822 –26 63 10,620 (2,220) Javier Varela, former Deputy CEO5) — — — — — (—) 3,559 — –270 –2,574 1,436 (1,262) Other members of EMT 44,324 6,599 34 2,727 28,529 (11,750) 35,176 16,439 –62 1,391 28,948 (10,327) Total 98,337 18,359 137 5,116 55,056 (22,587) 76,112 53,248 –486 –51 65,290 (19,883) 1) Includes benefits such as insurance and company car. 2) Includes STVP and also other additional short-term variable pay in accordance with individual agreements. 3) CEO until 31 March 2025. Remuneration above also includes remuneration during the notice period and severance pay. 4) Deputy CEO until 31 October 2024. Remuneration above also includes remuneration during notice period and severance pay. 5) Deputy CEO until 2 May 2024. 6) For information on share-based programmes, see Note 9 – Share-based remuneration. The former CEO was covered by the ITP plan and a supplementary pension plan - Volvo Management Pension (VMP). On average, the contributions for the former CEO were 30 per cent of the pensiona - ble salary. Disability benefits followed the ITP and VMP regulations. The CEO agreement for the current CEO is a fixed term and there is no notice period or severance pay included in the terms of agree - ment. The notice period for the former CEO was a maximum of 12 months in case of termination by either Volvo Car Group or the for - mer CEO. Furthermore, the former CEO was, in case of termination by Volvo Car Group, entitled to severance pay based on the fixed salary, during a period of maximum 12 months. Terms of employment and remuneration to a Deputy CEO The Board has assigned the People Committee (PC) to determine the remuneration to a Deputy CEO, proposed by the CEO, and in line with the remuneration guidelines approved by the shareholders’ meeting. A Volvo Car Group Deputy CEO is entitled to a remunera - tion consisting of a fixed annual base salary, short-term variable cash remuneration (STVP), long-term variable remuneration (PSP) and other benefits such as a company car and insurance. A Deputy CEO is covered by the ITP plan and a supplementary pension plan – Volvo Management Pension (VMP). On average, the pension contri - bution for a Deputy CEO is 28–30 per cent of the pensionable salary. Disability benefits follow the ITP and VMP regulations. The notice period for a Deputy CEO is a maximum of 12 months in case of termination by either Volvo Car Group or the Deputy CEO. Furthermore, a Deputy CEO is, in case of termination by Volvo Car Group, entitled to severance pay based on the fixed salary, during a period of maximum 12 months. Remuneration to Executive Management Team The Board has further assigned the People Committee to determine the remuneration to the Executive Management Team (EMT), proposed by the CEO, and in line with the remuneration guidelines approved by the shareholders’ meeting. Members of EMT are enti - tled to a remuneration consisting of a fixed annual base salary, short-term variable cash remuneration (STVP), long-term variable remuneration (PSP) and other benefits such as company car and insurance. Some of the EMT members also have retention awards, paid annu- ally during three years from start of their employment. The annual amount of the retention awards varies between SEK 1 m to SEK 1.7 m. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 79 ===== SIDA 80 ===== NOTE 9 SHARE-BASED REMUNERATION ACCOUNTING POLICIES Share-based long-term programmes The fair value of the share-based programmes are based on the share price reduced by expected dividends connected with the share during the vesting period. Additional social expenses are recognised as a liability, revalued at each balance sheet date. The aim of these share-based programmes is to generate engage- ment and commitment to the organisation on a long-term basis. The PSP is equity-settled while the ESMP programme contains both equity-settled and cash-settled components. For components of the programmes that are equity-settled, the total compensation expense is based on the fair value at the grant-date together with consideration of any relevant performance conditions and is recog - nised over the relevant service period, with a corresponding increase in equity. All share-based payment programmes with employees have a service component while one has performance components as well. The amount recognised as an expense is adjusted to consider the total number of awards for which the rele- vant non-market performance conditions and service conditions are expected to be met. The result is that the amount ultimately recog- nised is based on the actual number of awards that meet the relevant service and non-market performance conditions at the vesting date. For share-based payment transactions with non-vesting conditions, the grant-date fair value is adjusted to reflect these conditions. For components of the ESMP that are cash-settled, the liability is valued based on the fair value of the liability and is revalued at the end of each reporting period, with any changes in fair value recog - nised in the income statement for the period. Share-based incentive programmes Performance Share Plan (PSP) At the Annual General Meeting 2022, the shareholders adopted a share-based incentive programme (Performance Share Plan, PSP 2022), with a purpose to create a long-term focus amongst the par - ticipants on reaching Volvo Car Group´s long-term ambitions, as well as to facilitate recruitment and retention of employees with key competencies. Since the Board of Directors also believes that long- term share ownership is an important way to create alignment between the EMT and Volvo Car´s shareholders, it has implemented a policy setting out recommendations for certain levels of share ownership for members of the EMT. The PSP offers an opportunity for such members to increase their holdings to achieve the recom - mended share ownership. A new share-based incentive programme, PSP 2023, was adopted at the Annual General Meeting 2023 and at the Annual General Meeting 2024 a third share-based incentive programme was adopted, PSP 2024. A fourth share-based incentive programme was adopted at the Annual General Meeting 2025, PSP 2025. The struc - ture of these three plans corresponds to the incentive programme approved in 2022. In all programmes, each PSP participant will at commencement of the programme, free of charge receive a conditional award of Per - formance Shares (a “PSP Award”). The PSP Award will amount to the number of Performance Shares the value of which corresponds to a percentage of each participant’s gross annual base salary. The share price used to calculate the PSP Award value was the volume - weighted average price paid for the Volvo Car AB (publ.) class B share during a period of 30 trading days in connection with the commencement of the vesting period. The number of Performance Shares allocated to the participants after expiration of the three-year vesting period may amount to between 0 and 200 per cent of the PSP Award, depending on the satisfaction of four performance conditions; PSP 2022 performance conditions • average operating margin during financial years 2022–2024 (weight 40 per cent) • average revenue growth during financial years 2022–2024 (weight 40 per cent) • reduction of CO 2 emissions per car sold (average CO 2 emissions per car sold in 2018 compared to the average CO 2 emissions per car sold in 2024) (weight 10 per cent) • gender diversity (portion of non-male participants) in the STVP programme as of 31 December 2024 (weight 10 per cent) PSP 2023 performance conditions • average operating margin (excl share of income in JV and associ - ates) during financial years 2023–2025 (weight 30 per cent) • average revenue growth during financial years 2023–2025 (weight 30 per cent) • reduction of CO 2 emissions per car sold (average CO 2 emissions per car sold in 2018 compared to the average CO 2 emissions per car sold in 2025) (weight 30 per cent) strategies and to encourage all employees to achieve and exceed the business plan targets. To reach maximum pay-out a number of performance indicators must be reached. These include Volvo Car Group profit target (EBIT), excluding share of income in joint ven - tures and associates, and a target related to cash flow. A threshold, target and maximum level is set for each performance indicator. In order for any Volvo Bonus to be paid out in respect of each perfor - mance indicator, the threshold level needs to be met. The pay-out is generated between threshold and maximum. The pay-out is capped at 200 per cent of the so-called target bonus. Depending on the employee’s position, the employee is eligible for a certain target level that can be either a fixed amount or a percentage of the employee´s annual base salary 31 December at the end of the per - formance year. To be eligible for pay-out, the employee must remain within Volvo Car Group on the pay-out month. The remuneration is paid in cash. STVP for Senior Leaders The STVP for Senior Leaders is an incentive programme for the CEO, EMT and certain senior executives. The purpose of the STVP for Senior Leaders is to support the corporate strategy and the trans - formation of Volvo Car Group. To reach maximum pay-out a number of performance targets must be reached. Targets include Volvo Car Group profit target (EBIT), excluding share of income in joint ven - tures and associates, but also other targets related to sales and cash flow. A threshold, target and maximum level is set for each performance indicator. In order for any STVP to be paid out in respect of each performance indicator, the threshold level needs to be met. The pay-out is generated between threshold and maximum. The pay-out is capped at 200 per cent of the so-called target award. The target award is a percentage of the employee’s gross annual base salary on 31 December at the end of each performance year. To be eligible for pay-out, the employee must remain within Volvo Car Group on the pay-out month. The remuneration is paid in cash. Liability and cost For 2025 the Board of Directors decided that no Volvo Bonus or STVP should be paid out. For 2024 the cost for the Volvo Bonus and STVP programmes amounted to SEK 1,946 m including social secu - rity expenses, of which SEK 41 m was related to EMT. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 80 ===== SIDA 81 ===== PSP 2025 programme Total of which CEO of which former CEO1) of which other members of EMT Outstanding number of shares at the beginning of the year — — — — Granted shares during the year 6,655,658 838,601 — 754,781 Forfeited during the year –81,137 — — — Outstanding number of shares at the end of the year 6,574,521 838,601 — 754,781 PSP 2024 programme Outstanding number of shares at the beginning of the year 3,600,636 — 349,478 297,708 Granted shares during the year 39,115 — — — Forfeited during the year –423,860 — Reclassification — — –349,478 –67,256 Outstanding number of shares at the end of the year 3,215,891 — —2) 230,452 PSP 2023 programme Outstanding number of shares at the beginning of the year 2,268,229 — 271,492 192,039 Forfeited during the year –180,170 — — — Reclassification — — –271,492 –50,210 Outstanding number of shares at the end of the year 2,088,059 — —2) 141,829 PSP 2022 programme Outstanding number of shares at the beginning of the year 1,139,405 — 157,912 54,384 Forfeited during the year –76,493 — –10,951 –313 Decrease due to performance conditions –526,903 — –73,481 –27,038 Vested during the year –526,799 — –73,480 –27,033 Outstanding number of shares at the end of the year 9,210 — —2) — 1) CEO until 31 March 2025. 2) The PSP Awards have been prorated accordingly after leaving the position as CEO. For 2022 programme the prorated number of shares was 146,961, for 2023 programme the prorated number of shares was 173,150 and for 2024 programme the prorated number of shares was 106,280. • gender diversity (portion of non-male participants) in the STVP programme as of 31 December 2025 (weight 10 per cent) PSP 2024 performance conditions • average EBIT (excl share of income in JV and associates) during financial years 2024–2026 (weight 40 per cent) • compound annual growth rate during financial years 2024–2026 (revenue for financial year 2026 is compared to revenue for financial year 2023) (weight 25 per cent) • percentage of reduction of CO 2 emissions per Volvo car manufac- tured in 2018 compared to the average CO 2 emissions per car manufactured in 2026 (weight 25 per cent) • gender diversity (share of females within senior leaders) as of 31 December 2026 (weight 10 per cent) PSP 2025 performance conditions • average EBIT (excl share of income in JV and associates) during financial years 2025–2027 (weight 40 per cent) • accumulated free cash flow during financial years 2025–2027 (weight 30 per cent) • percentage of reduction of CO 2 emissions per Volvo car manufac- tured in 2018 compared to the average CO 2 emissions per car manufactured in 2027 (weight 20 per cent) • gender diversity (share of females within senior leaders) as of 31 December 2027 (weight 10 per cent) The performance conditions for all programmes include a minimum level which must be exceeded in order for any Performance Shares to be allocated at all. Should the minimum level be exceeded but the maximum level not reached, a proportionate number of Perfor - mance Shares will be allocated. The PSP 2022 and 2023 programmes shall each comprise a maxi - mum of 9,886,909 class B shares in Volvo Car AB (publ.) respec - tively, the PSP 2024 programme shall comprise a maximum of 12,539,648 class B shares in Volvo Car AB (publ.) and the PSP 2025 programme shall comprise a maximum of 14,436,511 class B shares in Volvo Car AB (publ.). Allocation of Performance Shares is also conditional upon the participants retaining the employment within the Volvo Car Group over the entire vesting period. For so-called good leavers the num - ber of performance shares allocated will be proportionately reduced for the time served during the vesting period. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 81 ===== SIDA 82 ===== PSP 2023 programme vesting level Performance condition, % Weight Minimum level Maximum level Perfor- mance outcome Achieved vesting level Average operating margin (excl share of income in JV and associates) during financial years 2023–2025 30 5.6 7 5.41) 0 Average revenue growth during financial years 2023–2025 30 7.5 17.5 3.5 0 Reduction of CO 2 emissions per car sold (average CO 2 emissions per car sold in 2018 compared to average CO 2 emissions per car sold in 2025) 30 26 40 31 71 Gender diversity (portion of non-male participants) in the STVP programme as of 31 December 2025 10 30 34 28.5 0 Overall achieved vesting level 21 1) The operating margin for 2025 has been adjusted for items affecting comparability in accordance with a decision from PC. PSP 2022 programme vesting level Performance condition, % Weight Minimum level Maximum level Perfor- mance outcome Achieved vesting level Average operating margin during financial years 2022–2024 40 6 7.6 5.8 0 Average revenue growth during financial years 2022–2024 40 10.5 14.5 12.7 111 Reduction of CO 2 emissions per car sold (average CO 2 emissions per car sold in 2018 compared to average CO 2 emissions per car sold in 2024) 10 26 40 24 0 Gender diversity (portion of non-male participants) in the STVP programme as of 31 December 2024 10 30 34 31.1 55 Overall achieved vesting level 50 The total value of the Performance Shares at the end of the vesting period may not exceed 400 per cent of the PSP Award value and the number of Performance Shares allotted may be reduced accord - ingly. Should there be a decline in the price of the Volvo Car AB (publ.) class B share such that the number of Performance Shares subject to allocation exceeds the maximum number of Performance Shares, the number of Performance Shares allocated to the partici - pants will be reduced proportionately. The Board of Directors is entitled to reduce the number of Perfor - mance Shares subject to allocation or, wholly or partially, terminate the PSP programmes in advance if significant changes in the Group or in the market occur which, in the opinion of the Board of Direc - tors, would result in a situation where the conditions for allocation of Performance Shares become unreasonable. The fair value of the Volvo Car AB (publ.) class B share at grant date is calculated as the market value of the share excluding the present value of expected dividend payments for the next three years and amounted to SEK 75.26 for the PSP 2022, SEK 40.43 for the PSP 2023, SEK 34.06 and SEK 24.56 for the PSP 2024 and SEK 17.37 for the PSP 2025, dependent on the date the Performance Share was granted on. During 2024 Volvo Car AB (publ.) modified the PSP 2022, PSP 2023 and PSP 2024 programmes by granting an additional PSP Award to participants to reflect the effects on the share price in connection with the distribution of Volvo Cars’ shareholding in Polestar Automotive Holding UK PLC. The fair value of the Volvo Car AB (publ.) class B share at grant date for the modification amounted to SEK 28.42 and is applicable to all programmes. Terms and condi - tions of vesting are aligned with the existing programmes. The expenses for the additional PSP Award will be recognised from the modification date up until the date for vesting in each programme. The total expenses for the additional Awards during 2025 was SEK 2 (2) m, of which SEK 1 (2) m is equity settled and SEK — (—) is cash settled. Liability and cost The total cost for the PSP programmes amounted to SEK 33 (1) m of which SEK 23 (4) m is equity-settled. SEK 10 (–3) m is cash- settled, of which SEK 9 (–1) m is related to social security expenses. The total liability amounted to SEK 16 (16) m. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 82 ===== SIDA 83 ===== date the Matching Share was granted. For ESMP 2023 the fair value of the share at grant date amounted to SEK 36.96, SEK 42.72, SEK 45.32, SEK 40.14, SEK 32.56 and SEK 33.6 dependent on the date the Matching Share was granted. For ESMP 2024 the fair value of the share at grant date amounted to SEK 35.32, SEK 31.56, SEK 31.41 and SEK 23.73 dependent on the date the Matching Share was granted. When the employee receives the Matching Shares, it is normally seen as a taxable benefit. Volvo Cars has therefore decided to con - tribute with an additional cash sum corresponding to a general tax level for each country. The contribution is calculated on a general level and is not individually set. Since this part of the programme meets the description of a cash- settled share-based payment transaction, a liability will be recog - nised and remeasured to fair value at the end of each reporting period. During 2024, Volvo Car AB (publ.) granted an additional cash contribution to ESMP 2022 and ESMP 2023 participants to reflect the effects on the share price in connection with the distribution of Volvo Cars’ shareholding in Polestar Automotive Holding UK PLC. Payment of the cash contribution is aligned with the vesting of the existing programmes and the cost for the additional cash contribu - tion will be taken from the modification date up until the date for vesting in each programme. The total cost for 2025 for the addi - tional cash contribution was SEK 9 (26) m (all cash settled). Liability and cost The total cost for the ESMP programme amounted to SEK 98 (153) m of which SEK 47 (80) m is equity-settled. SEK 51 (73) m is cash- settled, of which SEK 17 (24) m is related to social security expenses. The total liability amounted to SEK 58 (78) m. ESMP 2024 ESMP 2023 ESMP 2022 Outstanding number of shares at the beginning of the year 1,821,311 1,559,470 625,244 Granted shares during the year — — — Forfeited during the year –195,412 –43,468 –8,729 Vested during the year — –1,482,042 –616,515 Outstanding number of shares at the end of the year 1,625,899 33,960 — Employee Share Matching Plan (ESMP) In 2022, the Annual General Meeting also approved the implemen - tation of a share-based incentive programme (Employee Share Matching Plan, ESMP 2022) giving all permanent employees of Volvo Car Group the opportunity to become shareholders in Volvo Car AB (publ.). The purpose of the ESMP is to create engagement, commitment and motivation for the entire permanent workforce of Volvo Car Group, excluding the participants of PSP. Two additional ESMP programmes have been approved, one at the Annual General Meeting 2023, ESMP 2023 and another one at the Annual General Meeting 2024, ESMP 2024, similar to the one implemented during 2022. To participate in the programmes, the participants must make own investments in class B shares in Volvo Car AB (publ.) (Investment shares), up to an aggregate value for each participant at the time of the investment of no more than SEK 10,000. For each Investment share, the participants will be entitled to allocation of one Matching Share free of charge after the expiration of the two-year vesting period. Allocation of Matching Shares is conditional upon the participants retaining the employment within the Volvo Car Group over the entire vesting period and that the participants has retained the Investment shares purchased. Both ESMP 2022 and 2023 programmes shall comprise a maxi - mum of 7,832,000 class B shares in Volvo Car AB (publ.) respec - tively. The ESMP 2024 programme shall comprise a maximum of 16,578,427 class B shares in Volvo Car AB (publ.). Should there be a decline in the price of the Volvo Car AB (publ.) class B share such that the number of Matching Shares subject to allocation exceeds the maximum number of Matching Shares, the number of Matching Shares allocated to the participants will be reduced proportionately. The Board of Directors is entitled to reduce the number of Match - ing Shares subject to allocation or, wholly or partially, terminate the ESMP programmes in advance if significant changes in the Group or in the market occur which, in the opinion of the Board of Directors, would result in a situation where the conditions for allocation of Matching Shares become unreasonable. The fair value of the Volvo Car AB (publ.) class B share at grant date is calculated as the market value of the share excluding the present value of expected dividend payments for the next two years. For ESMP 2022 the fair value of the share at grant date amounted to SEK 44.34, SEK 50.71, SEK 49.43 and SEK 44.14 dependent on the OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 83 ===== SIDA 84 ===== NOTE 10 GOVERNMENT GRANTS ACCOUNTING POLICIES Government grants are recognised in the financial statements in accordance with their purpose, either as a reduction of expense or as a reduction of the carrying amount of the asset. Government grants intended to compensate for a specific expense are recog - nised as a cost reduction in the same period as the expense which the grant is intended to compensate has been recognised. Govern - ment grants related to acquiring assets are deducted from the car - rying amount of the asset and are recognised in the income state - ment over the life of a depreciable asset as a reduced depreciation expense. In cases where the received government grant is not intended to compensate for any expenses or the acquisition of assets, the grant is classified by the nature of the income, either as revenue or other income. Government grants for future expenses are recognised as deferred income. For more information relating to the accounting policies for emission credits see Note 2 – Revenue. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS A government grant is recognised when there is reasonable assur - ance that Volvo Car Group will comply with the conditions attached to the grant and that the grant will be received. Judgement includes assessing if Volvo Car Group is in compliance with the prerequisites in the contract or not and if there is a potential risk of repayment if these prerequisites are breached during the contract period. As of today, Volvo Car Group’s assessment is that there are no govern - ment grants received where there is a risk of material repayments. Volvo Car Group receives grants from several parties, mainly from the Slovak, American, Chinese and Belgian Governments as well as from the European Union. In 2025 the government grants received amounted to SEK 797 (167) m and the government grants realised in the income statement amounted to SEK 3,686 (1,116) m. Grants relating to earned emission credits amounted to SEK 3,501 (994) m. Non-monetary government grants have been received in China, mainly in the form of rent-free office and factory premises, and in the US in the form of reduced lease fees and reduced property tax related to office premises and the manufacturing site. NOTE 11 OTHER FINANCIAL INCOME AND EXPENSES ACCOUNTING POLICIES Financing expenses on repurchase obligations are presented as other financial expenses. Foreign exchange rate gains and losses on financial transactions are presented net in other financial income and expenses. Also presented net are fluctuations in the fair value of derivatives hedging financial transactions where hedge accounting is not applied. Information on the classification of financial instru - ments, see Note 19 – Financial instruments and Financial risks. Other financial income 2025 2024 Net change in fair value on financial instruments — 358 Net foreign exchange rate differences — 84  of which foreign exchange rate gains — 2,201  of which foreign exchange rate losses — –2,117 Other financial income 2 9 2 451 Other financial expenses 2025 2024 Financing expenses on repurchase obligations –917 –797 Net change in fair value on financial instruments –241 — Net foreign exchange rate differences –219 —  of which foreign exchange rate gains 3,256 —  of which foreign exchange rate losses –3,475 — Fees on factoring –151 –184 Expenses on credit facilities –99 –69 Other financial expenses –22 –26 –1,649 –1,076 NOTE 12 INVESTMENTS IN JOINT VENTURES AND ASSOCIATES ACCOUNTING POLICIES Joint ventures refer to joint arrangements whereby Volvo Car Group together with one or more parties have joint control and rights to the net assets of the arrangements. Associated companies are companies in which Volvo Car Group has a significant but not controlling influence, which generally is when Volvo Car Group holds between 20 and 50 per cent of the shares, but it also includes investments with less participation if sig - nificant influence is proven based on other facts and circumstances. Investments in joint ventures and associated companies are recognised in accordance with the equity method. When Volvo Car Group’s share of losses in a joint venture or associate equals or exceeds its interest in the joint venture or associate, Volvo Cars does not recognise further losses unless it has a legal or construc - tive obligations in relation to the joint venture or associate. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS A critical judgement in relation to joint ventures is whether joint control exists when Volvo Car Group has a shareholding of greater than 50 per cent but based on other facts and circumstances has joint control over the investee. This could be based on but not lim - ited to the governance structure of the joint venture, and proce - dures for appointment of key management and dispute resolution. The judgement that is made is whether Volvo Car Group has the power to direct the activities that significantly affect the returns of the joint venture, has a right to variable returns from the joint ven - ture, and the ability to exercise its power over the joint venture to affect the amount of its returns. Even with a greater than 50 per cent ownership in an investee, if Volvo Car Group cannot direct the activi- ties of the joint venture to significantly affect its returns from the joint venture, nor exercise its power over the joint venture. Volvo Car Group recognises Volvo Car Group Financial Leasing (Shanghai) Co., Ltd as a joint venture with a 55 per cent shareholding and voting interest because it has joint decision-making power over the operations. A critical judgement in relation to associates is whether signifi - cant influence exists where Volvo Car Group has voting power of less than 20 per cent but based on other facts and circumstances could have significant influence over a company. This could be OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 84 ===== SIDA 85 ===== based on the content of a shareholder agreement, evaluation of the company’s financing structure and board of directions composition, or other market-based assumptions and relationship-based facts. Volvo Car Group recognises Polestar Automotive Holding UK PLC as an associate with a 13.7 (18.0) per cent shareholding and 12.5 (14.9) per cent of voting power, and retains significant influence in the Polestar Group through its remaining shareholding, board rep - resentation, operational collaborations and technical reliance. 2025 2024 Share of income in joint ventures 597 –1,937 Share of income in associates 57 –2,785 Total 654 –4,722 Share of income in joint ventures and associates is specified below: 2025 2024 Lynk & Co Automotive Technology Group –137 –624 Polestar Automotive Holding Group 1) 46 –2,794 Ziklo Bank AB 379 393 Other companies 2) 366 –1,697 Total 654 –4,722 1) After the second quarter 2024, no further losses have been recognised. 2) Impairment of shareholding in NOVO Energy AB of SEK — (–1,702) m. Investments in joint ventures and associates 31 Dec 2025 31 Dec 2024 At beginning of the year/acquired acquisition value 8,998 14,142 Share of net income 654 –4,722 Reversal internal profit elimination –46 –2,018 Investment in NOVO Energy AB — 2,136 Investment in Volvo Car Group Financial Leasing (Shanghai) Co., Ltd. — 802 Investment in World of Volvo AB — 25 Investment in Zenuity AB 3 6 Divestment of Lynk & Co Automotive Technology Co., Ltd –2,235 — Liquidation of GV Automobile Technology (Ningbo) Co., Ltd –43 Reclassification from joint venture to subsidiary — –908 Revaluation of earn-out rights in Polestar Automotive UK PLC — 581 Dividends –205 –213 Translation difference –123 –833 Total 7,003 8,998 Volvo Car Group’s carrying amount on investments in joint ventures and associates: Corp. ID no. Country of incorporation % interest held 31 Dec 2025 31 Dec 2024 Joint ventures Volvo Trademark Holding AB 556567-0428 Sweden 50 7 7 VH Systems AB 556820-9455 Sweden 50 38 37 Zenuity AB 559073-6871 Sweden 50 — — Ziklo Bank AB 556069-0967 Sweden 50 3,905 3,717 World of Volvo AB 559233-9849 Sweden 50 89 87 VCFS Germany GmbH HRB 85091 Germany 50 4 4 VCIS Germany GmbH HRB 86800 Germany 50 12 9 Volvo Car Financial Services UK Ltd 12718441 United Kingdom 50 1,215 1,036 Volvo Car Group Financial Leasing (Shanghai) Co., Ltd 91310115MA1K49CY8Y China 55 1,694 1,612 GV Automobile Technology (Ningbo) Co., Ltd 91330201MA2AGKLQ8E China — (50) — 40 Lynk & Co Automotive Technology Co., Ltd 91330200MA2AF25Y7B China — (30) — 2,414 Associated companies VCC Försäljnings KB 969712-0153 Sweden 50 1 1 VCC Tjänstebilar KB 969673-1950 Sweden 50 5 2 Volvohandelns PV Försäljnings AB 556430-4748 Sweden 50 19 17 Volvohandelns PV Försäljnings KB 916839- 7009 Sweden 50 6 7 Polestar Automotive Holding UK PLC 3) 13624182 United Kingdom 14 (18) — — Trio Bilservice AB 556199-1059 Sweden 33 1 1 Göteborgs Tekniska College AB 556570-6768 Sweden 26 7 6 Leiebilservice AS 879 548 632 Norway 20 — 1 Carrying amount, participation in joint ventures and associates 7,003 8,998 3) The share of voting power is 12.5 (14.9) per cent. The share of voting power corresponds to holdings in per cent as per above, unless otherwise noted. For practical reasons, some of the joint ventures and associates are included in the consolidated financial statements with a certain time lag, normally one month. Lynk & Co Automotive Technology Co., Ltd The joint venture company Lynk & Co Automotive Technology Co., Ltd was an establishment between Volvo Cars (China) Investment Co., Ltd, (30 per cent), Ningbo Geely Automobile Industry Co., Ltd. (50 per cent) and Zhejiang Geely Holding Group Co., Ltd. (20 per cent). The principal activity of the Lynk & Co Automotive Technol - ogy Co., Ltd is to engage in the manufacturing and sale of vehicles under the “Lynk & Co” brand, and support after-sale services relating thereto. On 14 February, Volvo Cars divested its 30 per cent shareholding in Lynk & Co Automotive Technology Co., Ltd to Zhejiang Zeekr Intelligent Technology Co., Ltd., after approval at an Extraordinary General Meeting of Volvo Cars’ shareholders on 6 February 2025 as well as other regulatory approvals. Disposal consideration, including interest, amounted to RMB 5,463 corresponding to SEK 8,053 m. 70 per cent of the disposal consideration (RMB 3,824 m) was received at closing and the remaining 30 per cent of the disposal considera - tion (RMB 1,639 m) was paid on 28 November 2025 . Since the trans- OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 85 ===== SIDA 86 ===== action is a divestment under common control, the capital gain of SEK 5,818 m (excluding tax) was recognised directly in equity. The recognised losses in Lynk & Co Automotive Technology Co., Ltd have been accounted for up until 14 February 2025, using the equity method. Polestar Automotive Holding UK PLC The associated company Polestar Automotive Holding UK PLC is owned by Volvo Car Group’s wholly-owned subsidiary Snita Holding B.V., with 13.7 (18.0) per cent shareholding and 12.5 (14.9) per cent of voting power. Polestar Automotive Holding UK PLC is listed on the Nasdaq Stock Exchange in New York (ticker symbol: PSNY). Other major shareholders are PSD Investment Ltd 36.7 (39.2) per cent with voting power 42.3 (49.9) per cent, and Geely Sweden Automo - tive Investment B.V. 18.1 (23.8) per cent with voting power 16.5 (19.6) per cent. On 26 March 2024, the Annual General Meeting of Volvo Cars resolved, in accordance with the Board of Directors’ proposal, to distribute a portion of Volvo Cars’ shareholding in Polestar to Volvo Cars’ shareholders. In preparation for the distribution of the shares, an internal share transfer was made from Snita Holding B.V. to Volvo Cars parent company Volvo Car AB (publ.) at a purchase price equivalent of the fair market value of each share on the Nasdaq Stock Exchange in New York on the transaction date, 8 May 2024. On 8 May 2024, Volvo Car AB (publ.) completed the distribution of 62.7 per cent of its shareholding in Polestar Automotive Holding UK PLC amounted to SEK 9,332 m to Volvo Cars’ shareholders. The major shareholder is Geely Sweden Holdings AB with 78.65 per cent of the shares. The distribution involved a share split (2:1), whereby Volvo Cars’ shareholder received redemption shares which was redeemed as part of the distribution. The distribution of SEK 3.13 per share was made to the holders of the redemption shares on the record date of of 8th of May 2024, in total 2,979,524,179 redemption shares. For further information, see Note 21 – Equity. After the distribution, Volvo Car Group’s remaining shareholding in Polestar through the wholly-owned subsidiary Snita Holding B.V. was reduced to 18.0 per cent with a voting right of 14.9 per cent. On 30 October 2024, Volvo Cars executed its redemption right to acquire Northvolt’s 50 per cent shareholding in NOVO Energy AB. The NOVO Energy Group was up to 30 October 2024 reported in accordance with the equity method and thereafter reclassified to a subsidiary. For further information, see Note 27 – Business combi - nations and divestments. Until 8 May 2024, recognised losses in Polestar were accounted for using the equity method with a shareholding of 48.3 per cent and thereafter with 18.0 per cent. After the second quarter 2024, when recognised losses exceeded the carrying amount of Volvo Car Group’s investment in Polestar, no further losses have been recog - nised. On 23 July 2025, Polestar Automotive Holding UK PLC closed a private investment in public equity, “PIPE investment” of USD 200 m with its major shareholder PSD Investment Ltd. As a result, Volvo Car Group’s shareholding in Polestar was diluted from 18.0 per cent down to 16.5 per cent and voting rights were diluted down from 14.9 per cent to 14.8 per cent. On 23 December 2025, Polestar Automotive Holding UK PLC closed a PIPE investment of USD 300 m with two financial insti - tutes. As a result, Volvo Car Group’s shareholding was further diluted down to 13.7 per cent and voting rights were diluted down to 12.5 per cent. As of 31 December 2025, Volvo Cars’ fair value of the Polestar Group, listed on the Nasdaq Stock Exchange in New York, was SEK 2,498 (4,405) m based on the quoted market price. Ziklo Bank AB Ziklo Bank AB is a joint venture between Volvo Car Corporation and AB Volverkinvest. In Sweden, Ziklo Bank AB is one of the leading banks within vehicle financing services. During 2024, Volvofinans Bank AB changed its legal name to Ziklo Bank AB, however Volvo - finans still exists as a brand. Other companies On 8 December, GV Automobile Technology (Ningbo) Co., Ltd, a joint venture between Volvo Car Corporation and Ningbo Geely Automobile Technology Research & Development Co. Ltd, was liquidated. NOVO Energy AB was a joint venture between Volvo Car Corpora - tion (50 per cent) and Northvolt AB (50 per cent). The purpose of the joint venture was to develop and produce more sustainable bat - teries to contribute to powering the next generation of pure electric Volvo and Polestar cars. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 86 ===== SIDA 87 ===== The following tables present summarised financial information for the Volvo Car Group’s material joint ventures and associates. Summarised balance sheets Lynk & Co Automotive Technology Group 1) Polestar Automotive Holding Group 2) Ziklo Bank AB3) 2025 2024 2025 2024 2025 2024 Percentage ownership — 30 16 18 50 50 Non-current assets — 30,686 14,383 24,958 51,880 44,488 Cash and cash equivalents — 8,367 9,177 8,100 3,646 4,064 Other current assets — 45,614 14,865 17,403 6,106 5,525 Total assets — 84,667 38,425 50,461 61,632 54,077 Equity4) — 7,881 –42,627 –31,489 7,058 6,683 Non-current financial liabilities — 6,045 24,080 26,237 49,932 42,376 Non-current liabilities 4) — 4,551 2,240 3,055 1,372 1,174 Current financial liabilities — 2,745 31,802 28,968 — — Current liabilities — 63,445 22,930 23,690 3,270 3,844 Total equity and liabilities — 84,667 38,425 50,461 61,632 54,077 Summarised income statements Lynk & Co Automotive Technology Group 1) Polestar Automotive Holding Group 2) Ziklo Bank AB3) 2025 2024 2025 2024 2025 2024 Revenue — 62,282 21,592 21,373 6,124 5,745 Depreciation and amortisation — –5,429 –374 –1,188 –18 –20 Interest income — 315 707 173 — — Interest expense — –704 –2,789 –4,150 — — Profit/loss from continuing operations — –2,339 –15,499 –16,578 626 633 Profit (loss) for the year — –2,339 –15,499 –16,578 626 633 Other comprehensive income for the year — 137 386 –420 — — Total comprehensive income for the year — –2,202 –15,113 –16,998 626 633 Dividends received from joint ventures and associates during the year — — — — 191 201 Reconciliation of the summarised financial information presented to the carrying amount of its interest in joint ventures and associates. Reconciliation of summarised financial information Lynk & Co Automotive Technology Group 1) Polestar Automotive Holding Group 2) Ziklo Bank AB3) 2025 2024 2025 2024 2025 2024 Net asset of the joint venture and associate — 7,881 –42,627 –31,489 7,058 6,683 Proportion of Volvo Car Group's owner - ship, % — 30 16 18 50 50 Goodwill — — — — 376 376 Adjustments for differences in accounting principles — — 455 455 — — Adjustments for unrecognised share of losses — — 5,194 2,956 — — Adjustments for common control transaction — 54 –47 20 — — Polestar listing — — 8,970 8,970 — — Revaluation of earn-outs rights — — 315 315 — — Distribution of Polestar shares — — –5,626 –5,626 — — Equity-settled share-based payments — — –106 –92 — — Capital injection from investors other than Volvo Car Group — — –1,107 –764 — — Net foreign exchange rate effect — –4 –1,027 –560 — — Carrying amount of Volvo Car Group's interest in joint ventures and associates — 2,414 — — 3,905 3,717 1) Volvo Car Group’s equity share in Lynk & Co Automotive Technology Group was in year 2024 included with a time lag of a month, and a forecast for December. 2) Volvo Car Group’s equity share in Polestar Automotive Holding Group is included with a time lag of a quarter. 3) Volvo Car Group’s equity share in Ziklo Bank AB is included with a time lag of a quarter. 4) Equity and non-current liabilities are adjusted with the portion of untaxed reserves where appropriate. Significant restrictions For the Chinese joint venture company, there are some restrictions on the Volvo Car Group's ability to access cash. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 87 ===== SIDA 88 ===== NOTE 13 TAXES ACCOUNTING POLICIES Income taxes Income taxes include current and deferred taxes as well as with - holding tax, mainly on licenses, and are reported in the income statement unless the underlying transaction is recognised directly in equity or other comprehensive income. For those items the related income tax is also reported directly in equity or other comprehensive income. Deferred taxes are recognised on tax loss carry-forwards, unused tax credits and differences that arise between the taxable value and carrying value of assets and liabilities, with the exception of good - will. Volvo Car Group applies the mandatory temporary exemption in IAS 12 to not recognise or disclose information about deferred tax assets and liabilities related to the OECD Pillar Two rules. Informa - tion regarding the Group’s exposure to the enacted Swedish Pillar Two legislation is presented in this note. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Deferred tax assets The recognition of deferred tax assets requires assumptions about the level of future taxable income and the timing of recovery of deferred tax assets. These assumptions take into consideration forecasted taxable income. The measurement of deferred tax assets is subject to uncertainty and the actual result may diverge from judgements due to future changes in business climate, altered tax laws etc. An assessment is made at each closing date of the likeli - hood that the deferred tax asset will be utilised. If needed the carry - ing amount of the deferred tax asset will be altered. The judgements that have been made may affect net income both positively and negatively. Income tax recognised in income statement 2025 2024 Current income tax for the year –2,690 –2,799 Current income tax for previous years –450 –317 Deferred taxes 647 –3,434 Pillar Two – minimum tax –7 –9 Withholding taxes 1) 171 –255 Other taxes 27 29 Total –2,302 –6,785 1) Withholding tax on i.a. royalty and licence sales, mainly to China. Reconciliation between current tax rate in Sweden and effective tax rate 2025 2024 Income before tax for the year –666 22,719 Tax according to applicable Swedish tax rate, 20.6 (20.6)% 137 –4,680 Operating income/costs, non-taxable –20 6 Withholding taxes 171 –255 Other taxes, non-tax deductible 20 20 Share of income in joint ventures and associates, tax exempt 113 –1,127 Capital gains or losses, non-tax deductible –75 –334 Effect of different tax rates –214 –186 Tax effect on deferred tax due to change of tax rate –30 — Non-recognised deferred tax asset on tax losses carry forward 2) –2,267 –70 Remeasurements of previously non-recognised deferred tax on tax losses 110 6 Revaluation of previously non-valued losses and other temporary differences –212 –134 Other –35 –31 Total –2,302 –6,785 2) Non-recognised deferred tax asset of tax losses carry forwards and temporary tax adjustments relates to China. Deferred tax assets were not recognised due to IAS 12 criteria regarding convincing evidence of future taxable income and limitation of tax losses carry-forwards to five years. The impairment is allocated to taxable losses and tempo - rary tax adjustments recognised during the year SEK -1,594 (-70) m and remeasurement of previous year recognised deferred tax assets of SEK -673 (—) m. The corporate statutory income tax rate in Sweden was 20.6 (20.6) per cent. The effective tax rate on profit before taxes was –345.65 (29.86) per cent. Income tax recognised in other comprehensive income 2025 2024 Deferred tax Tax effects on cash flow hedge reserve 1,770 –1,109 Tax effect of remeasurement of provisions for post-employment benefits 496 –55 Tax effects on translation difference of hedge instruments of net investments in foreign operations 154 –65 Total 2,420 –1,229 Specification of deferred tax assets 31 Dec 2025 31 Dec 2024 Goodwill arising from the purchase of the net assets of a business –9 36 Provision for employee benefits 467 1,042 Unutilised tax loss carry-forwards and tax credits 3) 11,975 10,534 Accruals 7,287 9,258 Reserve for unrealised income in inventory 767 1,730 Provision for warranty 1,690 1,757 Fair value of financial instruments — 743 Lease liabilities 1,578 2,385 Other temporary differences 1,681 1,517 Total deferred tax assets 25,436 29,002 Netting of assets/liabilities –17,073 –16,742 Total deferred tax assets, net 8,363 12,260 Specification of deferred tax liabilities 31 Dec 2025 31 Dec 2024 Fixed assets 17,824 20,112 Untaxed reserves 125 47 Auto lease portfolio 7,317 7,125 Fair value of financial instruments 1,202 — Other temporary differences 469 538 Total deferred tax liabilities 26,937 27,822 Netting of assets/liabilities –17,073 –16,742 Total deferred tax liabilities, net 9,864 11,080 3) In 2025, Volvo Cars has adjusted the presentation of certain unused tax credits in the US, resulting in a reclassification amounting to SEK 1,099 (1,278) m, to more accurately reflect the nature of these items. Comparative figures have been restated (prior Other non-current assets). OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 88 ===== SIDA 89 ===== Volvo Car Group is subject to the OECDs model rules for Pillar Two and on 13 December 2023, the government of Sweden, where the parent company is incorporated, enacted the Pillar Two income tax legislation effective from 1 January 2024 and applicable from fiscal year 2024. Based on the legislation, the Group is obliged to pay additional tax on profits in each jurisdiction where the effective tax rate according to the GloBE rules is below the minimum tax rate of 15 per cent. The Group has identified exposure to Pillar Two income taxes on profits earned in a few countries. The exposure comes from the constituent entities (mainly operating subsidiaries) in these jurisdictions. The current tax expense related to Pillar Two income taxes is disclosed separately. The Group is continuing to assess the impact of the Pillar Two income tax legislation on its future financial performance and is adapting to local compliance rules as they are implemented. For the sake of completeness, it should be noted that some countries, including China, have not yet implemented Pillar Two rules (or a local Qualified Domestic Top Up Tax) within their domestic legislation. Changes in deferred tax assets and liabilities during the reporting period 31 Dec 2025 31 Dec 2024 Net book value of deferred taxes at 1 January 3) 1,180 2,977 Deferred tax income/expense recognised through income statement 647 –3,434 Change in deferred taxes recognised directly in other comprehensive income –2,420 1,229 Reclassifications 3) — 143 Exchange rate impact –908 265 Net book value of deferred taxes at 31 December 3) –1,501 1,180 3) In 2025, Volvo Cars has adjusted the presentation of certain unused tax credits in the US, resulting in a reclassification amounting to SEK 1,099 (1,278) m, to more accurately reflect the nature of these items. Com - parative figures have been restated (prior Other non-current assets). As of 31 December 2025, the recognised tax loss carry-forwards amounted to SEK 48,726 (41,780) m. The tax value of these tax loss carry-forwards is reported as an asset. Of the total SEK 10,876 (9,256) m recognised deferred tax assets related to tax loss carry- forwards, SEK 6,878 (6,085) m relates to Sweden with indefinite periods of utilisation. SEK 3,327 (2,265) m relates to US where tax loss carry-forwards are expected to be utilised before expiration date and SEK 334 (698) m relates to China where tax loss carry- forwards are expected to be utilised before expiration date. The Group had total unrecognised deferred tax assets of SEK 2,404 (353) m related to tax losses carry-forwards and temporary tax adjustments, these were not recognised due to IAS 12 criteria regarding convincing evidence of future taxable income and limita - tion of tax losses carry-forwards to five years. The majority, SEK 2,289 (—) m is related to China with definite periods of utilisation. The final years in which the recognised loss carry-forwards can be utilised are shown in the following table. Tax-loss carry-forwards; year of expiration 31 Dec 2025 31 Dec 2024 Due date Expiring within one year 11 — Expiring after one year but within five years 808 2,791 Expiring after five years 47,907 38,989 Total 48,726 41,780 NOTE 14 EARNINGS PER SHARE ACCOUNTING POLICIES Basic earnings per share is calculated as net income attributable to owners of the parent company divided by the weighted average number of ordinary shares outstanding during the period. Effects on Earnings per share (EPS) connected with equity- settled employee incentive plans are reflected in the diluted earnings per share calculation when they are dilutive. For the performance share programme this is based on the fulfilment of the performance conditions. For the employee share matching programme dilutive effects are calculated using the treasury stock method. Basic earnings per share 2025 2024 Net income attributable to owners of the parent company 174 15,401 Net income attributable to owners of ordinary shares in the parent company 174 15,401 Weighted average number of ordinary shares outstanding, basics1)2) 2,968,505,485 2,977,042,500 Basic earnings per share (SEK) 0.06 5.17 Diluted earnings per share 2025 2024 Net income in basic earnings per share 174 15,401 Net income in diluted earnings per share 174 15,401 Weighted average number of ordinary shares outstanding, basic1)2) 2,968,505,485 2,977,042,500 Dilutive effect for share-based payment programmes 2,431,998 1,135,042 Weighted average number of ordinary shares, diluted 2,970,937,483 2,978,177,542 Diluted earnings per share (SEK) 0.06 5.17 1) The weighted average number of outstanding shares takes into account the weighted average effect of changes in treasury shares during the year. 2) Total number of treasury shares held by Volvo Car Group amounts to 14,894,838 (5,020,194) shares. NOTE 15 INTANGIBLE ASSETS ACCOUNTING POLICIES The intangible assets held by Volvo Car Group consists primarily of vehicle product development, licenses and patents, trademark, goodwill, dealer network and investments in IT-systems and soft - ware. Volvo Car Group applies the cost model for measurement of intangible assets. Product development Volvo Car Group applies a waterfall model with distinct gates that governs all phases of product development projects. Costs related to product development are only recognised as assets when the recognition criteria are met. Normally this correlates with the indus - trialisation phase of the project when the product is prepared for serial production and the product is launched. Costs prior to the industrialisation phase of the project, the concept phase, are recog - nised in the income statement as incurred. Development costs that are contractually shared with other par - ties are recognised as intangible assets to the extent of the relevant proportion of Volvo Car Group interests. Incurred costs for devel - oped technology not controlled by Volvo Car Group are recognised in the income statement as cost of sales at the time of sale. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 89 ===== SIDA 90 ===== Amortisation methods for intangible assets Intangible assets with finite useful lives are amortised on a straight- line basis over their respective expected useful lives. When assets are used only in the production of a specific vehicle or platform, the useful life of the assets is aligned with the production period for that vehicle or platform. The amortisation period for contractual rights such as licences does not exceed the contract period. All intangible assets are considered to have a finite useful life, with the exception of goodwill and trademarks. Trademarks are assumed to have indefi- nite useful lives since Volvo Car Group has the right and the intention to continue to use the trademarks for the foreseeable future, while generating net positive cash flows for Volvo Car Group. An intangible asset with an indefinite useful life is not amortised. The following use- ful lives are applied to intangible assets with finite useful lives: Dealer network 30 years Software 3–8 years Product development 3–15 years Patents, licences and similar rights 3–10 years Amortisation is included in cost of sales, research and development expenses as well as selling or administrative expenses, depending on how the assets have been used. Amortisation of intangible assets related to vehicle platforms are included in research and develop - ment expenses. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Management regularly reassesses the useful life of all significant assets. When the useful life of an intangible asset is reduced, amor - tisation is accelerated and increased in future periods to reflect the reduction over time over which the Group will derive benefits from the asset. A shorter estimated useful life is not always an indicator of impairment, as impairment is characterised by a change in the expected cash flows to be derived from the asset. When assessing the useful life, climate-related risks were considered and found to have no material impact. The carrying amount of intangible assets with finite useful lives is tested for impairment when there are indicators of a decline in the expected future economic benefits related to the asset. Impairment testing of assets that do not generate largely independent cash inflows is performed by grouping assets per platform, which constitute the cash-generating units (CGUs) of Volvo Cars. Product development1) 4) Software4) Assets under con- struction Trademark and goodwill2) Other intangible assets3) Total Acquisition cost Balance at 1 January 2024 51,441 8,031 37,466 4,218 10,008 111,164 Additions 6,306 25 14,552 — 47 20,930 Acquired through business combinations — — — 115 — 115 Divestments and disposals –3,645 –769 –190 –179 –69 –4,852 Reclassifications 28,233 2,244 –30,928 — 124 –327 Effect of foreign currency exchange rate differences 1 –7 46 — 125 165 Balance at 31 December 2024 82,336 9,524 20,946 4,154 10,235 127,195 Additions 3,326 24 14,570 — 52 17,972 Acquired through business combinations — — — 102 — 102 Divestment of business –4 — — — — –4 Divestments and disposals –1,698 –396 –289 — –35 –2,418 Reclassifications 11,717 1,990 –14,082 — 245 –130 Effect of foreign currency exchange rate differences –2 7 –66 –5 –206 –272 Balance at 31 December 2025 95,675 11,149 21,079 4,251 10,291 142,445 Accumulated amortisation and impairment Balance at 1 January 2024 –29,068 –3,459 — — –6,533 –39,060 Amortisation expense –7,399 –959 — — –846 –9,204 Divestments and disposals 3,616 429 — — 64 4,109 Reclassifications — — — — 853 853 Effect of foreign currency exchange rate differences — 25 — — –137 –112 Balance at 31 December 2024 –32,851 –3,964 — — –6,599 –43,414 Amortisation expense 4) –8,171 –1,185 — — –845 –10,201 Impairment –7,237 — –136 –180 –58 –7,611 Divestment of business 4 — — — — 4 Divestments and disposals 1,228 326 — — 35 1,589 Reclassifications — 6 — — 5 11 Effect of foreign currency exchange rate differences 2 –40 — — 180 142 Balance at 31 December 2025 –47,025 –4,857 –136 –180 –7,282 –59,480 Net balance at 31 December 2024 49,485 5,560 20,946 4,154 3,636 83,781 Net balance at 31 December 2025 48,650 6,292 20,943 4,071 3,009 82,965 1) Volvo Car Group has capitalised borrowing costs related to product development of SEK 970 (1,120) m. A capitalisation rate of 4.4 (4.6) per cent was used to determine the amount of borrowing costs eligible for capitalisation. 2) Of the total Net balance at 31 December 2025, Goodwill amounted to SEK 473 (556) m. 3) Other intangible assets refers to licences, dealer network and patents. 4) During the year, due to changes in the cycle plan concerning China, planned production in the Daqing manufacturing plant was affected, resulting in increased amortization of SEK 208 m recognised in Cost of sales and Research and development. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 90 ===== SIDA 91 ===== Intangible assets with indefinite useful lives are tested annually for impairment. Trademarks are tested for impairment at Volvo Car Group level, as they do not generate largely independent cash inflows. Goodwill arising from business combinations is allocated to the relevant platform CGUs and tested for impairment at that level. In calculating an impairment test certain estimations must be made with regards to future cash flows, required return on invest - ments and other adequate assumptions. The estimated future cash flows are based on assumptions that represent management’s best estimate of the economic conditions that will exist during the asset’s remaining useful life and are based on internal business plans or forecasts. Future cash flows are determined on the basis of long- term planning, which is approved by management and valid at the date of preparation of the impairment test. The planning is based on expectations regarding future market share, the market growth, the products’ profitability, as well as managements most current assumptions about climate related matters. During 2025, Volvo Cars identified indicators of impairment for one of its cash-generating units (CGUs); the EX90 and ES90 platform CGU. As a result, an impairment test was performed during the sec - ond quarter of the financial year. The CGU comprises of product development intangible assets, as well as an allocation of produc - tion related assets and goodwill relating to the EX90 and ES90. The indicators of impairment were primarily related to: • The launch of the EX90 and ES90 platform experienced delays, which led to increased development costs due to extended time - lines and additional resource requirements. Furthermore, the delayed release resulted in the platform entering the market under less favourable macroeconomic conditions than originally anticipated, impacting its initial performance and return expecta - tions. • The imposition of increased tariffs on imported raw materials and automotive parts and cars, which significantly impacted produc - tion costs and profitability. • The transition from ICE vehicles to BEVs has been progressing at a slower pace than previously forecasted. As a result, Volvo Cars conducted an impairment test. Impairment test and key assumptions The recoverable amount of the CGU was determined based on its value in use, calculated using a discounted cash flow model. A pre- tax discount rate of 10.7 per cent was used, reflecting CGU-specific risks and market conditions at the time of assessment. The key assumptions applied in the model included: • Cash flow projections based on business plans approved by man - agement and the Board covering the expected useful life of the platform. • Assumptions regarding sales volumes, pricing, and margins, including the anticipated impact of tariffs, as well as the CGU’s contribution toward internal netting of emission credits between BEV and ICE cars. These assumptions reflect management’s best estimates of eco - nomic conditions and future performance at the time of the impair - ment assessment, considering the market environment and future developments. Impairment loss recognised As a result of the impairment test, an impairment loss of SEK 11,431 m was recognised in the consolidated income statement during the second quarter. The impairment, which included the full write-down of goodwill allocated to the CGU, was allocated on a pro-rata basis across the CGU’s assets based on their carrying amounts. The impairment loss was distributed as follows: • SEK 7,373 m was recognised under Research and development expenses, related to the impairment of product development assets. • SEK 3,982 m was recognised under Cost of sales, related to the impairment of allocated buildings, machinery and equipment. • SEK 76 m was recognised under Other operating income and expenses, related to the impairment of allocated goodwill. At the reporting date, management assessed whether any impair - ment indicators existed for this CGU and concluded that no further impairment or reversal was required. A Volvo Car Group level impairment test was also performed for non CGU specific assets, including remaining goodwill, trademark and other assets, and no impairment was identified. Carrying amount of the EX90/ES90 platform CGU before and after impairment SEK m Carrying amount before impairment 34,543 Impairment loss recognised –11,431 Recoverable amount 23,112 Sensitivity analysis The impairment assessment is sensitive to changes in key assump - tions used in determining the recoverable amount and the sensitivity analysis presented reflects conditions at the second quarter impair - ment test date; as of the reporting date, management assessed that there is no significant risk of additional impairment based on rea - sonably possible changes in key assumptions. A change in the fol - lowing assumptions, holding all other variables constant, would have had the following approximate impact on the recoverable amount: • A 1 per cent increase in the discount rate would reduce the recov - erable amount by approximately SEK 1,441 m. • A 1 per cent decrease in the yearly sales volumes would reduce the recoverable amount by approximately SEK 306 m. • A 1 per cent decrease in the sales margin of the cars and associ - ated parts and accessories, including effects of tariffs and emission credits, would reduce the recoverable amount by approximately SEK 2,841 m. NOTE 16 TANGIBLE ASSETS ACCOUNTING POLICIES The tangible assets held by Volvo Car Group consist primarily of buildings, land and land improvements, machinery and equipment, right-of-use assets (RoU), and assets under operating leases. The cost method is applied for the measurement of tangible assets. Buildings, land and land improvements include assets such as office buildings, production facilities, leasehold improvements and struc- tures built to make land ready for use, such as drainage and roadways. Machinery and equipment include production related assets, such as type-bound tooling, robots and assembly lines, as well as office equipment. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 91 ===== SIDA 92 ===== Buildings and land1)2) Machinery and equipment1) 2) 3) Construction in progress 1) Right-of-use assets4) Assets under operating leases5) Total Acquisition cost Balance at 1 January 2024 30,045 112,832 12,755 12,549 13,182 181,363 Additions 591 12,578 12,744 5,217 11,358 42,488 Acquired through business combinations 181 77 1,937 8 1,047 3,250 Divestments and disposals –507 –6,402 –176 –1,494 –305 –8,884 Reclassifications 1,960 6,047 –8,983 –2 –11,139 –12,117 Effect of foreign currency exchange rate differences 1,152 2,349 586 407 173 4,667 Balance at 31 December 2024 33,422 127,481 18,863 16,685 14,316 210,767 Additions 284 7,126 14,981 2,095 8,178 32,664 Acquired through business combinations — — — — 4,036 4,036 Divestment of business — — — –8 –2,351 –2,359 Divestments and disposals –226 –5,309 –176 –3,091 –376 –9,178 Reclassifications 2,106 5,092 –7,277 — –14,361 –14,440 Effect of foreign currency exchange rate differences –2,257 –6,179 –898 –1,400 –829 –11,563 Balance at 31 December 2025 33,329 128,211 25,493 14,281 8,613 209,927 Accumulated depreciation and impairment Balance at 1 January 2024 –13,177 –77,832 — –5,427 –814 –97,250 Depreciation expense –1,236 –7,648 — –2,070 –2,572 –13,526 Acquired through business combinations –1 –2 — — –42 –45 Divestments and disposals 373 4,855 — 1,392 109 6,729 Reclassifications –3 1 — 3 2,221 2,222 Effect of foreign currency exchange rate differences –408 –1,231 — –114 –20 –1,773 Balance at 31 December 2024 –14,452 –81,857 — –6,216 –1,118 –103,643 Depreciation expense 3) –1,289 –8,431 — –1,636 –2,388 –13,744 Impairment 1) –583 –3,284 –186 — — –4,053 Acquired through business combinations — — — — –527 –527 Divestment of business — — — 7 700 707 Divestments and disposals 138 3,560 — 752 60 4,510 Reclassifications 13 –74 — — 2,096 2,035 Effect of foreign currency exchange rate differences 732 2,878 — 451 118 4,179 Balance at 31 December 2025 –15,441 –87,208 –186 –6,642 –1,059 –110,536 Net balance at 31 December 2024 18,970 45,624 18,863 10,469 13,198 107,124 Net balance at 31 December 2025 17,888 41,003 25,307 7,639 7,554 99,391 1) Includes EX90/ES90 Platform CGU impairment losses of SEK 3,982 m recognised in Cost of sales. 2) Volvo Car Group has no mortgages in Buildings and land or Machinery and equipment. For further information regarding pledged assets, see Note 25 – Contingent liabilities and Pledged assets. 3) During the year, due to changes in the cycle plan concerning China, planned production in the Daqing manufacturing plant was affected, resulting in increased depreciation of SEK 437 m recognised in Cost of sales. 4) For information regarding Right-of-use assets, see Note 7 – Leases. 5) Assets under operating leases mainly relate to vehicles sold with repurchase commitments and contracts under the name Care by Volvo. Depreciation methods for tangible assets Tangible assets are depreciated on a straight-line basis over their estimated useful lives. When a component of a tangible asset has a cost that is significant in relation to the total cost of the item and a useful life that differs from the useful life of the other components of the item, the components are depreciated separately. RoU assets where Volvo Car Group is a lessee are depreciated over the lease contract period. When assets are used only in the produc- tion of a specific vehicle or platform, the useful life of the assets is aligned with the production period for that vehicle or platform. The following useful lives are applied in Volvo Car Group: Buildings 15–50 years Land improvements 15–30 years Machinery 8–30 years Equipment 3–20 years Land Indefinite Depreciation is included in cost of sales, research and development expenses as well as selling or administrative expenses depending on how the assets have been used. For more information on RoU assets and assets under operating leases, see Note 7 – Leases. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Management regularly reassesses the useful life and residual value of all significant assets. When the useful life of a tangible asset is reduced, depreciation is accelerated and increased in future periods to reflect the reduction of time over which the Group will derive economic benefits from the assets. A shorter estimated useful life is not always an indicator of impairment, as impairment is character - ised by a change in the expected cash flows to be derived from the asset. When assessing the useful life, climate-related risks were consid - ered and found to have no material impact. This is because manage - ment takes certain mitigation efforts against physical risks, among other things, considering potential impacts of climate change during initial design and construction of tangible assets as well as main - taining insurance in case significant damage or disruption does occur. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 92 ===== SIDA 93 ===== NOTE 17 INVENTORIES ACCOUNTING POLICIES Inventories consist of raw material and consumables, work in pro - gress, finished goods and goods for resale, and emission credits. Assets held under operating lease, with a maturity less or equal to 12 months, are also recognised as inventory. Inventories are meas - ured at the lower of cost and net realisable value. Cost of inventories comprise of all costs of purchase, production charges and other expenditures incurred in bringing the inventories to their present location and condition. The initial value of emission credit invento - ries is based on the fair value on the date they are earned. The cost of inventories of similar assets is established using the first-in, first-out method (FIFO). Net realisable value is calculated as the selling price in the ordinary course of business, less estimated costs of completion and selling costs. For groups of similar prod - ucts, a Group valuation method is applied. Physical stock counts are carried out annually or more often where appropriate in order to verify the records. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Net realisable value is based on the most reliable evidence of the amount Volvo Car Group expects to realise from vehicles and com - ponents on future sales trends or needs, for components, and takes into account items that are wholly or partially obsolete. A future unexpected decline in market conditions could result in an adjustment in future expected sales, requirements and in esti - mated selling prices assumptions, which may require an adjustment to the carrying amount of inventories. 31 Dec 2025 31 Dec 2024 Raw materials and consumables 71 364 Work in progress 11,161 13,768 Current assets held under operating lease 10,685 10,964 Finished goods and goods for resale 31,857 35,398 Emissions credits 5,250 1,961 Total 59,024 62,455 Of which value adjustment reserve: –2,080 –1,282 The cost of inventories recognised as an expense and included in cost of sales amounted to SEK 280,868 (303,208) m. Current assets held under operating lease consists of a sale of vehicles combined with a repurchase commitment with a maturity less or equal to 12 months. NOTE 18 ACCOUNTS RECEIVABLE AND OTHER CURRENT AND NON-CURRENT ASSETS ACCOUNTING POLICIES Accounts receivables are recognised at amortised cost. An allow - ance for expected credit loss is recognised when the receivable is initially recognised. The recognised allowance for credit losses con - sists of incurred as well as of expected credit losses. A credit loss has been incurred when there has been an event that has triggered the customers inability to pay. The expected credit loss allowance is based on a multiplier consisting of average historical write-offs and forward-looking macroeconomic data. In these cases, there has not yet been any events incurred showing any inability to pay. If it has been determined that an accounts receivable is uncol - lectible, it will be written off and derecognised. It usually means that collection has been unsuccessful and an entity has no reasonable expectations of recovering the contractual cash flows on the receivable in its entirety or a portion thereof. Other non-current assets 31 Dec 2025 31 Dec 2024 Endowment insurance for pensions 367 363 Rental deposition 29 38 Other non-current assets 1) 3,826 2,583 Total 4,222 2,984 Accounts receivable and other current assets 31 Dec 2025 31 Dec 2024 Accounts receivable, non-group companies 11,463 12,989 Accounts receivable, related companies 9,778 9,791 VAT receivables 4,098 3,837 Prepaid expenses and accrued income 2) 6,568 6,947 Other financial receivables — — Restricted cash 39 120 Other receivables 2) 3) 3,059 3,761 Total 35,005 37,445 1) In 2025, Volvo Cars has adjusted the presentation of certain unused tax credits in the US, resulting in a reclassification amounting to SEK 1,099 (1,278) m, to more accurately reflect the nature of these items. Com- parative figures have been restated (prior Other non-current assets). 2) Whereof prepaid expenses and accrued income from related compa - nies amounted to SEK 1,480 (1,530) m, and other receivables to related companies amounted to SEK 423 (437) m. 3) Whereof interest-bearing receivables amounted to SEK 419 (679) m. The carrying amounts of tangible assets are tested for impairment if there are indicators of a decline in value with regards to future economic benefits related to the asset. For these calculations, cer - tain estimations must be made with regards to future cash flows, required return on investments and other adequate assumptions. The estimated future cash flows are based on assumptions that rep - resent management’s best estimate of the economic conditions that will exist during the asset’s remaining useful life and are based on internal business plans or forecasts. Future cash flows are deter - mined on the basis of long-term planning, valid at the date of prepa - ration of the impairment test and approved by management. The planning is based on expectations regarding future market share, the market growth, the products’ profitability, as well as manage - ments most current assumptions about climate related matters. During the year, Volvo Cars identified indicators of impairment for one of its cash-generating units (CGUs); the EX90 and ES90 plat - form CGU. As a result, an impairment test was performed, which led to the recognition of impairment losses across both intangible and tangible assets. The portion of the impairment related to tangible assets amounted to SEK 3,982 m and was recognised under Cost of sales. Further details regarding the impairment test are disclosed in Note 15 – Intangible assets. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 93 ===== SIDA 94 ===== NOTE 19 FINANCIAL INSTRUMENTS AND FINANCIAL RISKS ACCOUNTING POLICIES Recognition and derecognition Accounts receivable are recognised on the balance sheet when they are issued by the Group. Accounts payable are recognised on the balance sheet when the invoice is received. Regular-way acquisi - tions of financial assets are recognised on the balance sheet upon the actual transfer, which occurs on the settlement date. Financial liabilities such as issued bonds and loan liabilities to financial insti - tutions, are recognised on the balance sheet on the settlement date. Other financial assets and liabilities are recognised on the balance sheet when Volvo Car Group becomes involved according to the contractual provisions of the instrument. Financial assets are initially recognised at fair value plus transac - tion costs, except for financial assets carried at fair value through profit or loss. In this case transaction costs are expensed in the income statement. Financial liabilities are initially recognised at fair value less transaction costs, except for those financial liabilities carried at fair value through profit or loss. For these liabilities trans - action costs are expensed in the income statement. Volvo Car Group derecognises financial assets or a portion of a financial asset from the balance sheet upon expiry, when it has been settled or when all significant risks and rewards linked to the asset have been transferred to a third party. In those cases where Volvo Car Group concludes that all significant risks and rewards have not been transferred, the portion of the financial assets corresponding to Volvo Car Groups’ continuous involvement continues to be recognised. Volvo Car Group derecognises financial liabilities or a portion of a financial liability from the balance sheet when the obligation in the contract has been settled, cancelled, or expired. Classification of financial assets Volvo Car Group classifies financial assets depending on how the asset is managed and the characteristics of the assets’ contractual cashflows. The following measurement categories are applied at Volvo Car Group: • financial assets at amortised cost • financial assets at fair value through profit or loss • financial assets at fair value through other comprehensive income Accounts receivable and other financial receivables Accounts receivable are classified at amortised cost, and are meas - ured at their nominal value, reflecting the short-term nature of these assets and the immaterial impact of discounting are recognised. Accounts receivable are presented net after allowance for expected credit loss, see Note 18 – Accounts receivable and other current and non-current assets. Customer invoices may be subject to factoring arrangements with a financial institution. In those cases, the invoices are derecognised from accounts receivable immediately upon settlement. If the credit risk has not transferred to the financial institution the receivables remain on the balance sheet and are presented as Other non- current and current financial assets. Other financial receivables presented as non-current or/and current other interest-bearing receivables and other assets, are measured at amortised cost. Deposits A deposit is a type of interest-bearing instrument held at a financial institution where funds are placed for a fixed term at a predeter - mined interest rate and cannot be withdrawn before maturity. A deposit also exist without a fixed maturity date, in which case advance notice is required before funds can be withdrawn. Deposits are measured at amortised cost. Equity repurchase agreements Equity repurchase agreements refer to arrangements where Volvo Cars accepts quoted equity securities as collateral for an invest - ment of cash. These equity repurchase agreements are measured at Aging analysis of accounts receivable and accounts receivables from related companies Not due 1–30 days overdue 30–90 days overdue >90 days overdue Total 2025 Accounts receivable gross 19,646 684 383 770 21,483 Loss allowance –201 –4 –8 –29 –242 Accounts receivable net 19,445 680 375 741 21,241 2024 Accounts receivable gross 18,950 943 729 2,291 22,913 Loss allowance –109 — –5 –19 –133 Accounts receivable net 18,841 943 724 2,272 22,780 Accounts receivable amounted to SEK 21,241 (22,780) m including a credit loss allowance of SEK 242 (133) m of which SEK 28 (37) m is related to allowance for expected credit losses. As of 31 December 2025, the total credit loss allowance amounted to 1.13 (0.58) per cent of total accounts receivable. The size and geographical spread of the accounts receivable are closely linked to the distribution of Volvo Car Group’s sales. The accounts receivable and other current assets do not contain any significant concentration of credit risk to individual customers or markets. Change in loss allowance for accounts receivable is as follows: 2025 2024 Balance at 1 January 133 126 Additions 164 20 Reversals –25 –13 Write-offs –25 –1 Translation difference –5 1 Balance at 31 December 242 133 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 94 ===== SIDA 95 ===== comprise forward contracts, options, swap contracts and interest rate swaps. The effective portion of changes in the fair value of hedging instruments is recognised in Other comprehensive income and accumulated in equity under other reserves. Amounts deferred in equity are recycled to the income statement in the periods in which the hedged items affect profit or loss, within Revenue, Cost of sales, or Interest expenses, as applicable. If the identified relationships are no longer deemed effective, the fluctuation in fair value of the hedg - ing instrument from the last period in which the instrument was considered effective is recognised in the income statement. If the hedged transaction is no longer expected to occur, the hedge’s accumulated changes in value are immediately transferred from other reserves in equity through other comprehensive income to the income statement. Fair value hedge Volvo Car Group applies fair value hedge accounting, where the designation should eliminate the significant accounting mismatch of a fixed rate liability carried at amortised cost and a related deriv - ative contract, such as an interest rate swap which is recognised at fair value through profit or loss. The carrying value of the hedged item, namely a specified part of a fixed rate issued bond is initially recognised at amortised cost. Subsequent changes related to the hedged risks are reflected in the carrying amount of the liability as a hedge adjustment with the offsetting entry going to the income statement. Changes in the hedge adjustments of the hedged item and the hedging instrument are both recognised in the income statement and the accounting mismatch is therefore eliminated. Gains and losses related to the interest rate swaps and changes in the hedge adjustment of the hedged fixed rate debt are recognised in the income statement. Hedge ineffectiveness is also reported in the income statement. Net investment hedge Volvo Car Group designates financial liabilities in the relevant for - eign currency against currency exposure arising from investments in the subsidiaries. Volvo Car Group designates debt instruments in EUR and USD as hedging instruments to mitigate the translation exposure on their net investments in these currencies. Net invest - ments in foreign operations consists of the value of Volvo Car Group’s share of the net assets of the foreign subsidiary. The hedge reserve with regards to net investment in foreign operations is terial. As such, the nominal amount provides a reliable approxima - tion of fair value for reporting purposes. Financial liabilities that are designated as hedged items in fair value hedges are remeasured at fair value concerning the hedged risk throughout the hedging relationship period. Payables under supplier financing programmes Liabilities arising under supplier financing programmes are classi - fied based on their contractual substance at initial recognition. Certain balances are recognised and presented as Accounts paya - ble, while other balances are initially recognised and presented as Other current liabilities. The programmes do not result in derecog - nition of the liabilities. Derivatives Derivatives with positive fair values, representing the accumulated unrealised gains, are recognised as Non-current or Current deriva - tive assets. Conversely, derivatives with negative fair values, repre - senting the accumulated unrealised losses, are recognised as Non- current or Current derivative liabilities. Realised and unrealised gains and losses from fluctuation in fair value of these instruments are recognised in the income statement. The realised and unrealised gains and losses from fluctuations in the fair value of derivatives designated as hedging instruments are recognised in Other comprehensive income and accumulated in other reserves in equity until the underlying transactions occur. The accumulated gain or loss on these hedging instruments is then recycled to the income statement. Hedge accounting Volvo Car Group applies hedge accounting when derivative instru - ments and financial liabilities are included in a documented hedge relationship. At the inception of the hedge, Volvo Car Group docu - ments the relationship between hedging instruments and hedged items, as well as its risk management strategy and objective for undertaking hedging transactions. Cash flow hedge Volvo Car Group applies cash flow hedge accounting to manage variability in cash flows arising from highly probable forecast trans - actions, including foreign currency exposures on future sales and purchases, expected commodity consumption, and variable interest payments on liabilities to credit institutions. Hedging instruments amortised cost. The quoted equity securities received as collateral, which are held in a custodian account, are not recognised on Volvo Cars’ balance sheet as the Group does not have the right to sell or re-pledge the collateral and has not obtained control over the equity instrument. Received collateral is measured based at fair value using quoted prices in active markets at the reporting date. Convertible loan Volvo Car Group classifies the convertible loan receivable as finan - cial assets at fair value through profit or loss. The convertible loan was initially recognised at fair value. The convertible loan receivable includes a conversion option, which provides the holder with a possibility to convert the loan balance into equity instruments, as shares in the company. This results in subsequent valuation based on prevailing market quotations, which ensures that changes in fair value are continuously recognised in the income statement. Equity instruments Volvo Car Group includes equity instruments as financial assets at fair value through profit or loss, which is comprised of holdings in listed and unlisted equity instruments, unlisted warrants and earn- out rights. Volvo Car Group presents changes in fair value of equity instruments in Share of income in joint ventures and associates and Other financial income and expenses. Bank acceptance drafts Bank acceptance drafts (BADs) are received primarily in connection with car sales to dealers in China and represent a common form of payment within the Chinese market. BADs may be held to maturity, traded, or redeemed prior to maturity at a discount. Volvo Cars may redeem these instruments before maturity in order to accelerate cash inflows, accepting a discount that reflects the early settle - ment. BADs are measured at fair value through other comprehen - sive income. Classification of financial liabilities After initial recognition all financial liabilities are carried at amor - tised cost under the effective interest rate method, except deriva - tives that constitute liabilities which are measured at fair value. Short-term financial liabilities, including trade payables and other obligations due within one year, are typically measured at their nom - inal value. Given their short maturity and the absence of significant interest components, the effect of discounting is considered imma - OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 95 ===== SIDA 96 ===== Derivatives with a positive fair value are adjusted with the default probability derived from the Credit Default Swap curve per counter - party. The same adjustment is made for the derivatives with a nega - tive fair value with Volvo Car Group’s own credit risk using the Default Probability of Volvo Car AB (publ.) credit default swaps. The following table outlines the valuation methods employed by Volvo Car Group for various types of financial instruments as described: Type of instrument Valuation method Forward exchange contracts Measured using quoted forward exchange rates and yield curves derived from quoted interest rates matching the maturities of the contracts. FX options Currency options are measured using the Garman-Kohlhagen model, an adaptation of the Black-Scholes model. Interest rate swaps Measured at the present value of future cash flows, estimated and discounted based on appli - cable yield curves derived from quoted interest rates. Commodity forwards Measured using quoted commodity prices and yield curves derived from quoted interest rates matching maturities of the contracts. Convertible loan Measured by discounting projected future cash flows using the current interest rate curve and a credit spread derived from a benchmark portfolio. The convertible loan may be converted into shares at the same price offered to all other market par - ticipants, without any discount or incentive. Unquoted equity instruments Certain unobservable inputs are used by applying the market approach, primarily based on the most recent transaction; adjustments made if significant changes in circumstances occur. Unlisted warrants Measured using the Black-Scholes model, consid - ering vesting criteria, timing, risk-free interest rates, and volatility of the underlying share price. Earn-out rights Measured using assumptions regarding the proba - bility and timing of earn-out payments based on future performance targets. Payables under supplier financing programmes Supplier invoices may be subject to supplier financing programmes under which a financial institution pays participating suppliers early, and Volvo Car Group settles the original invoice amount with the institution in accordance with agreed payment terms. Payables aris - ing from operating purchasing activities are presented as accounts payable until settlement, with related cash flows reported within operating cash flows. A similar programme is also used for certain suppliers related to investing activities. Under this programme, the financial institution pays suppliers early and, in this specific setup, suppliers are also able to issue invoices at an earlier stage than under standard com - mercial practice, thereby accelerating both invoice issuance and payment. Liabilities arising from this programme are presented as other current liabilities until settlement, with related cash flows reported within investing cash flows, reflecting the nature of the underlying activities. While these programmes provide suppliers with earlier access to liquidity (and, in the investing related setup, earlier invoice issuance), the timing of Volvo Car Group’s own cash outflows remains broadly unchanged compared with previous commercial practice. Payment due dates for the operating related programme presented as accounts payable were 60–75 (60–75) days after invoice date. For the investing related programme presented as other current lia - bilities, payment due dates for amounts included in the programme were 180–360 days after invoice date. For both programmes, comparable payables outside the programmes had payment due dates of 60–75 (60–75) days after the invoice date. All payables included in the programmes, including information on payment status between the financial institution and suppliers, are included in the table for financial instruments by category and measurement level. recorded in other comprehensive income and accumulated in cur - rency translation reserve in equity in order to meet the translation difference of consolidated foreign subsidiaries. In the event of a divestment, the accumulated hedge effect is transferred from the hedge reserve in equity to the income statement. Fair value hierarchy levels Financial instruments are divided into three levels depending on the market information available. Level Fair value determination Comprises 1 Measurement based on quoted prices in active markets for identical assets or liabilities that the Volvo Car Group can access at the measurement date. Quoted equity instruments measured at fair value through income statement. 2 Measurement based on inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Derivatives designated as hedging instruments or meas - ured at fair value through income statement. 3 Measurement based on unob - servable inputs for the asset or liability. Unquoted equity instruments measured at fair value through income statement. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Accounting for financial instruments includes performing certain estimates and judgements. The fair values of financial instruments traded in active markets are based on quoted market prices at the end of the reporting period. For financial assets the fair value is based on the current bid price. The fair values of financial instru - ments that are not traded in active markets are determined by using valuation techniques. Volvo Car Group uses a range of valuation methods and incorporates assumptions based on market prices prevailing at the end of the reporting period. Alternative techniques, such as estimated discounted cash flows (DCF valuation), are employed to assess the fair value of the remaining financial instru - ments. DCF valuations are performed using the applicable yield curve for the duration of the instruments for non-optional deriva - tives and option pricing models are used for any optional deriva - tives. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 96 ===== SIDA 97 ===== The table below presents financial instruments by category and measurement level. 31 Dec 2025 31 Dec 2024 Note Measure- ment level Carrying value Fair value Carrying value Fair value Financial assets carried at amortised cost Accounts receivable 18 — 21,241 21,241 22,780 22,780 Other financial r eceivables, non-current and current 1) 18 — 5,022 5,030 2,167 2,179 Cash and cash equivalents 20 — 57,564 57,578 56,373 56,390 83,827 83,849 81,320 81,349 Financial assets carried at fair value through profit or loss Other long-term securities holdings 10,454 10,454 12,753 12,753  of which convertible loan 2) 2 9,177 9,177 11,261 11,261  of which equity instruments 3 1,277 1,277 1,473 1,473  of which equity instruments 1 — — 19 19 Non-current and current derivative assets 2 6,666 6,666 768 768  of which currency derivatives – designated hedging instruments 2 3,447 3,447 214 214  of which commodity derivatives – designated hedging instruments 2 2,920 2,920 229 229  of which interest rate swap – designated hedging instruments 2 168 168 — —  of which currency derivatives – not designated hedging instruments 2 131 131 117 117  of which interest rate swap derivatives 2 — — 208 208 17,120 17,120 13,521 13,521 Financial assets carried at fair value through other comprehensive income Marketable securities 20 2 1 1 — — 1 1 — — Financial liabilities carried at amortised cost Accounts payable — 57,768 57,768 56,479 56,479  of which payable under supplier financing programmes — 4,434 4,434 3,458 3,458  of which suppliers received payment from financial institution — 4,033 — 2,885 — Non-current and current bonds and liabilities to credit institutions 3) — 30,790 31,797 29,493 30,242 Other financial liab ilities, non-current and current 4) 24 — 22,147 22,147 18,217 18,217  of which payable under supplier financing programmes — 712 712 — —  of which suppliers received payment from financial institution — 712 — — — 110,705 111,712 104,189 104,938 Financial liabilities carried at fair value through profit or loss Non-current and current derivative liabilities 2 738 738 4,142 4,142  of which currency derivatives – designated hedging instruments 2 269 269 2,160 2,160  of which commodity derivatives – designated hedging instruments 2 249 249 1,206 1,206  of which interest rate swap – designated hedging instruments 2 57 57 — —  of which currency derivatives – not designated hedging instruments 2 57 57 625 625  of which interest rate swap – not designated hedging instruments 2 106 106 — —  of which interest rate swap derivatives 2 — — 151 151 1) Includes items presented as Other non-current and current assets on the balance sheet, amounted to SEK 3,787 (727) m. 2) The value of the conversion option connected to the convertible loan receivable to the Polestar Group is nil because the loan is convertible into equity securities at a price equivalent to what has been offered to all other market participants, without any preferential rights, dis - counts, or incentives. 3) The carrying amount of the bonds includes a fair value adjustment amounting to SEK 95 (235) m, which relates to fair value hedging. 4) Includes the repurchase value obligation on cars sold with repurchase commitment which are presented as Other non-current and current liabilities on the balance sheet amounted to SEK 18,480 (17,241) m. Includes also items presented as Other non-current and current lia - bilities in the balance sheet, amounting to SEK 3,613 m. Excluding the lease liabilities which is presented as Other non-current and current liabilities in the balance sheet amounting to SEK 6,871 (9,699) m. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 97 ===== SIDA 98 ===== The table below presents the movements within Level 3, fair value hierarchy. 31 Dec 2025 31 Dec 2024 Equity instruments Equity instruments Opening balance 1,473 1,507 Investment 50 100 Impairment –2 — Change in fair value –52 –163  of which recognised in Other financial income and expenses –52 414  of which recognised in Share of income in joint ventures and associates — –577 Exchange rate differences –192 29 Closing balance 1,277 1,473 The table below presents gains and losses, interest income and expenses that have affected the income statement divided per category of financial instruments. 2025 2024 Note Gains/ Losses Interest income Interest expenses 1) Gains/ Losses Interest income Interest expenses 1) Recognised in operating income 6 Financial instruments carried at fair value – designated hedging instruments Currency derivatives and commodity derivatives 964 — — –1,631 — — Financial instruments carried at amortised cost Accounts receivable and accounts payable –2,228 — — 810 — — Impact on operating income –1,264 — — –821 — — Recognised in financial income and expenses 11 Financial instruments carried at fair value – not designated hedging instruments Other long-term securities holdings –502 909 — 297 1,094 — Interest-bearing securities — — — — 1 — Currency derivatives and interest rate swaps 1,496 — –398 –1,018 — –777 Financial instruments carried at amortised cost Cash and cash equivalents and Marketable securities –1,527 1,215 –1 1,179 1,439 –1 Financial receivables carried at amortised cost –1,200 159 — 489 184 — Financial liabilities carried at amortised cost 2) 80 — –1,703 –1,566 — –1,360 Accounts receivable and accounts payable — 26 — — — — Impact on financial income and expenses –1,653 2,309 –2,102 –619 2,718 –2,138 1) Excluding interest expenses on leasing liabilities which amounted to SEK –214 ( –406) m, interest expenses on pensions which amounted to SEK –288 (–262) m and capitalised interest on R&D which amounted to SEK 973 (1,120) m. 2) Including the financial liabilities designated for fair value hedge which amounted to SEK 139 (–281) m. Excluding gain and losses on lease liabilities which amounted to SEK 6 (–6) m. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 98 ===== SIDA 99 ===== Financial risks Volvo Cars operations are exposed to various types of financial risks such as currency risk, refinancing and liquidity risk, interest rate risk, commodity price risk and credit risk. The treasury function of Volvo Cars is responsible for managing and controlling these financial risks, ensuring that appropriate financing is in place through capital market transactions, loans and committed credit facilities and is responsible for managing Volvo Cars’ liquidity. The management of financial risks is governed by Volvo Car Group’s Financial Policy Framework which is approved by the Board of Directors (BoD) and is subject to review every second year or when otherwise required. The policy mandates the minimisation of the effects from fluctuating financial markets on Volvo Cars’ finan - cial earnings. Policy compliance is reported to the CFO on a monthly basis. Policy compliance is also a part of the general treasury reporting to the BoD. There is an alert function in place safeguard - ing mandate limits on a daily basis. Currency risk management Currency exposure risk arises as Volvo Cars produces and sells cars in various countries. The currency exposure risk arises from the mix of currencies used when procuring or selling goods and services. Relative changes in currency rates have a direct impact on Volvo Cars’ operating income, financial income and expense, balance sheet and cash flow statement. In order to minimise the currency risk, Volvo Cars aims to achieve natural hedging to the greatest possible extent. The currency risk is related to: • expected future cash flows from sales and purchases made in foreign currencies (transaction risk) • changes in value of assets and liabilities denominated in foreign currencies (translation risk) • net investments in foreign operations (translation risk) Transaction exposure risk Volvo Car Group Financial Policy Framework Volvo Cars’ functional currency is Swedish krona. The currency transaction exposure risk arises from cash flows in currencies other than the functional currency. Sales in combination with purchases made in currencies other than Swedish krona determine the trans - action exposure of the Group. The Volvo Car Group Financial Policy Framework states, regarding currency transaction risk management, that up to 80 per cent of the future expected cash flows in the coming 24 months and up to 60 per cent of the future expected cash flows in the coming 25 to 48 months can be hedged with adequate financial instruments, such as currency options, forward contracts, foreign exchange swaps or combined instruments with maturities matching the expected timing of cash flows from sales and purchases made in foreign currencies. Hedging strategies using financial instruments for long- term exposures, over 48 months, require approval by the Board of Directors (BoD). The management of currency risk within the above stipulated intervals is delegated by the BoD to the treasury function via the CFO. For currency risk management purposes, transaction exposure is expressed in terms of Cash Flow at Risk (CFaR), which is the maxi - mum loss, in one year, at a 95 per cent confidence level. The CFaR is based on the cash flow forecast, currency exchange rates, market volatility and correlations. The hedging mandates are proposed by the treasury function and approved by the CFO and are expressed as a strategic hedge level of CFaR. The strategy allows for mandates to deviate from a bench - mark. The deviation mandate is given as a tactical mandate in terms of timing. The hedging mandates are revised at least quarterly. Status at year end The table below presents the distribution of the total currency inflow and outflow for Volvo Cars. Inflow, % Outflow, % 2025 2024 2025 2024 CNY 18 19 38 43 EUR 28 30 38 34 GBP 8 7 2 2 JPY 2 2 3 2 USD 22 21 16 16 Other 23 21 4 4 The CFaR at year end for the cash flows over a one-year horizon for the Group, excluding hedges, was approximately SEK 4,137 (5,168) m. The table below presents the percentage of the forecasted cash flows that were hedged (expressed both in nominal terms and in CFaR). 0–12 months 13–24 months 25–48 months 2025 2024 2025 2024 2025 2024 Nominal hedge, % 35 39 11 12 0 2 CFaR hedge, % 43 42 19 28 0 5 The table below presents cash flow hedge volumes by maturity for the 10 largest exposure currencies, nominal amou nts in local currency (M)1) Maturity CAD CHF CNH EUR GBP KRW NOK PLN TRY USD Total fair value of derivatives 2) Average hedge rate — 12.35 1.34 11.20 12.74 — 0.93 2.56 — 10.17 1–12 months — –365 6,169 796 –1,285 — –350 –1,370 — –1,595 2,321 13–24 months — –355 92 212 –274 — — — — –555 857 1) The average duration of the portfolio was 8 (10) months. 2) The fair value of the outstanding derivatives for hedging of currency price risk in future commercial cash flows amounted to SEK 3,178 ( –1,946) m. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 99 ===== SIDA 100 ===== The table below presents the translation exposure of net invest - ments in foreign operations. Currency Investments in foreign operations CNY 14,238 EUR 12,009 USD 6,077 BRL 934 JPY 728 TRY 622 AUD 398 GBP 377 Other 1,366 Total 36,749 Refinancing and liquidity risk management Capital Structure Volvo Cars shall maintain a capital structure that ensures a prudent balance between financial risk and cost of capital while supporting the Group’s strategic transformation under varying market conditions. The capital structure should ensure Volvo Cars maintains strong access to capital markets and progresses toward achieving an investment-grade credit rating. Volvo Cars current external rating by Moodys is Ba1 and BB+ by Standard & Poor’s. Refinancing risk management Volvo Car Group Financial Policy Framework Refinancing risk is the risk that Volvo Car does not have access to adequate financing on acceptable terms at any given point. All drawdowns on new loans are evaluated against future liquidity needs and investment plans. Volvo Cars should for the coming 12 months, at any given time, have available committed financing for investments and for repayment of maturing debt. To limit the risk of refinancing, debt maturing over the next 12 months should not exceed 25 per cent of total debt. Status at year end At the end of the year, the outstanding debt of bonds and liabilities to credit institutions, excluding lease contracts and transaction costs, in Volvo Cars was SEK 30,790 (29,347) m. During the year bond and liabilities to credit institutions of SEK 7,363 (7,797) m matured or were amortised. The remaining credit duration of out - Translation exposure risk Volvo Car Group Financial Policy Framework Translation exposure risk at Volvo Cars refers to the conversion of balance sheet items and net investments in foreign operations into the Group’s functional currency, the Swedish krona. This risk arises due to fluctuations in exchange rates over time. The financial posi - tion of assets and liabilities in foreign currencies is monitored and managed daily to mitigate income statement impacts. Part of the translation risk in investments in the Eurozone and Americas is hedged using debt instruments, known as net investment hedges. The recognition of translation effects varies based on the under - lying exposure. Translation exposure: Comprises Recognition: Operational assets and liabilities Accounts receivable, Accounts payable, and Warranty provisions Other operating income and expenses Financial assets and liabilities Cash at bank, depos - its, equity repurchase agreements, converti - ble loan, derivatives, bonds and loans. Other financial income and expenses Investments in foreign operations Assets and liabilities Other comprehensive Income Status at year end At the end of the year, the total translation effect of investments in foreign operations was SEK –4,646 (965) m, the effects are recog- nised in equity through other comprehensive income. A 10 per cent change in the Swedish krona against major currencies would have a net impact on net investments in other comprehensive income of approximately SEK 3,675 (4,016) m. standing debt was 3.2 (2.9) years. At year end, debt maturing over the next 12 months amounted to 8 per cent of total debt. In January, a EUR 500 m bond, issued in 2017, was repaid. In March, a drawdown of USD 438 m was made under an existing green bilateral loan facility. The facility was originally signed in 2023/2024 and with final repayment during 2035. In June, EUR 500 m was raised through a green bond issuance with a tenor of four years. In September, a new green bilateral eight-year loan agreement of EUR 150 m was signed. The loan facility remains undrawn as of the end of 2025. In October, an existing eight-year credit facility amounting to CNY 3,090 m was terminated. In November, the first extension option on the existing sustaina - bility-linked Revolving Credit Facilities was exercised, extending maturities by one year. The updated maturities for the Revolving Credit Facilities of EUR 500 m and EUR 1,500 m are in 2028 and 2030, respectively. The table below presents the outstanding debt. Funding Currency Nominal amount in local currency (M) Nominal- amount in SEK (M) Bank loan USD 23 215 Bank loan SEK 357 357 Bank loan GFF 1) SEK 1,000 1,000 Bank loan GFF 1) EUR 182 1,967 Bank loan GFF 1) USD 438 4,037 Green bond EUR 2,000 21,634 Green bond SEK 1,500 1,500 Other PLN 29 75 Total 30,785 1) Loans agreed to solely finance eligible projects in accordance with the Green Financing Framework. In relation to all external financing, there are information undertak - ings and covenants in line with the Loan Market Association (LMA) and capital market standards. These are monitored and calculated quarterly to fulfil the terms and conditions stated in the financial agreements. Covenants are based on standard measurements such as EBITDA and Net debt. At the end of the year, there is substantial headroom in the fulfilment of all covenants. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 100 ===== SIDA 101 ===== Bonds and liabilities to credit institutions – amortisation schedule 33323126 27 28 29 30 34 35 Bonds and liabilities to credit institutions – amortization schedule, MSEK 0 4,000 3,000 2,000 1,000 5,000 6,000 8,000 7,000 Bank loan Bank Loan GFF1)Green Bond 1) Loans GFF (Green Financing Framework): Loans agreed to solely finance eligible projects in accordance with the Green Financing Framework. Outstanding bonds and liabilities to credit institutions (at successive year end) 32313025 26 27 28 29 33 34 35 0 20,000 15,000 10,000 5,000 25,000 30,000 40,000 35,000 Bank loan Bank Loan GFF1)Green Bond Outstanding bonds and liabilities to credit institutions (at successive year end), MSEK 1) Loans GFF (Green Financing Framework): Loans agreed to solely finance eligible projects in accordance with the Green Financing Framework. 31 Dec 2025 31 Dec 2024 Less than 3 months 3 months to 1 year 1–5 years Over 5 years Less than 3 months 3 months to 1 year 1–5 years Over 5 years Financial assets Other long-term securities holdings 1) — — 9,177 — — — 11,263 — Other non-current interest-bearing receivables — — 1,141 94 — — 1,312 128 Non-current derivative assets — — 1,743 — — — 183 100 Other non-current assets — — 3,951 266 — — 2,830 154 Total financial non-current assets — — 16,012 360 — — 15,588 382 Accounts receivable 2) 19,733 1,508 — — 20,442 2,338 — — Current derivative assets 1,623 3,300 — — 222 263 — — Marketable securities — 1 — — — — — — Cash and cash equivalents 57,564 — — — 56,373 — — — Other current assets 2,581 888 — — 3,344 907 — — Total financial current assets 81,501 5,697 — — 80,381 3,508 — — Total financial assets 81,501 5,697 16,012 360 80,381 3,508 15,588 382 Financial liabilities Liabilities to credit institutions, non-current — — 4,301 2,422 — — 2,475 1,410 Non-current bonds — — 21,599 46 — — 13,039 5,787 Other non-current interest-bearing liabilities — — 9,265 2,277 — — 9,416 1,438 Non-current derivative liabilities — — 253 — — — 1,252 — Other non-current liabilities — — 516 10 — — 2,191 — Total financial non-current liabilities — — 35,934 4,755 — — 28,373 8,635 Accounts payable 52,248 5,520 — — 52,811 3,668 — — Liabilities to credit institutions, current 67 855 — — 89 970 — — Current bonds 1,500 — — — 5,723 — — — Other interest-bearing liabilities, current 8,245 8,692 — — 9,996 7,067 — — Current derivative liabilities 276 209 — — 989 1,901 — — Other current liabilities 2,952 1,497 — — 2,063 1,904 — — Total financial current liabilities 65,288 16,773 — — 71,671 15,510 — — Total financial liabilities 65,288 16,773 35,934 4,755 71,671 15,510 28,373 8,635 1) Maturity structure of the other long-term securities holdings does not include holdings in listed and unlisted equity instruments, such as holdings in other entities. 2) For aging analysis of accounts receivable see Note 18 – Accounts receivable and other current and non-current assets. The table below presents the maturity structure of Volvo Cars Group’s financial assets and liabilities. The figures shown are contractual, undiscounted cash flows which Volvo Cars is liable to pay or eligible to receive. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 101 ===== SIDA 102 ===== Liquidity risk management Volvo Car Group Financial Policy Framework Liquidity risk is the risk that Volvo Cars is unable to meet ongoing financial obligations on time. In order to meet seasonal operational volatility, Volvo Cars shall ensure continuous availability of liquidity through unutilised credit facilities, accessible cash and cash equiva - lents, and marketable securities corresponding to 10 per cent or more of revenue. Future liquidity needs and investment plans are the basis for the risk assessment of liquidity risk management. Factoring Volvo Cars customer invoices may be subject to factoring with a financial institution. This enables Volvo Cars to receive payment for its receivable within a few days after invoicing and thus be able to release liquidity at an earlier stage than would otherwise have been the case. Supplier financing programmes Volvo Cars participates in supplier financing programmes. The prin - cipal purpose of the arrangements is to facilitate efficient payment processing and enable the willing suppliers to receive payments from the financial institutions before the invoice due date. The arrangement does not extend the payment terms or alter the timing of the Group’s cash outflows beyond the normal terms agreed with non-participating suppliers. However, participating suppliers may under the programme, issue invoices earlier than under standard commercial practice, enabling earlier settlement by the financial institution. Status at year end At the end of the year, Volvo Cars cash and cash equivalents, mar - ketable securities and committed credit facilities amounted to SEK 80,822 (88,549) m, approximately 23 (22) per cent of revenue. The liquidity of Volvo Cars is strong considering the maturity profile of the external debt, the balance of cash and cash equivalents, marketable securities and available credit facilities from banks. Undrawn committed credit facilities 31 Dec 2025 31 Dec 2024 Expiring within one year 1,623 4,808 Expiring after one year but within five years 21,634 22,895 Expiring after five years — 4,473 Total 23,257 32,176 Interest rate risk management Changes in interest rates will impact Volvo Cars’ income statement and the value of financial assets and liabilities. The return on cash and cash equivalents and marketable securities, as well as the cost of liabilities to credit institutions and issued bonds are impacted by changes in interest rates. The exposure can be either direct from interest-bearing debt or indirect through leasing or other financing arrangements. Volvo Car Group Financial Policy Framework According to the policy, the interest rate risk in Volvo Cars’ net debt position has a benchmark duration of 12 months. The policy allows for a deviation of –6/+6 months from the benchmark. The interest rate mandate is proposed by the treasury function and approved by the CFO. The hedging mandate shall be revised at least quarterly. To manage interest rate risk, Volvo Cars uses interest rate swaps. Status at year end At the end of the year, Volvo Cars’ interest-bearing assets consisted of cash at bank, time deposits and interest-bearing securities. The average interest fixing term on these assets was one (one) month. The average interest fixing term on debt was 13 (10) months. At year-end the duration of the net debt position was 11 (8) months. The average cost of borrowing was 4.32 (4.67) per cent. The table below presents the estimated effect of a parallel shift in interest rate curves up or down by one per cent (100 basis points) on all exposed external debt and interest rate derivatives. The effect relates to market value changes in debt and the effect on the com - ing year’s interest cashflow. Interest rate sensitivity, effect on Finance net 2025 2024 Market rate +1% –65 –92 Market rate –1% 66 94 The impact from cash and cash equivalents and marketable securi - ties is immaterial as the fixed interest period of the asset portfolio is short as it is dominated by cash at bank. Benchmark rate reform The interest rate benchmark reform refers to the transition from the existing, traditional interest rate benchmark – Interbank Offered Rates (IBOR) – to new risk-free benchmarks. Volvo Cars is currently exposed to external interest rate risk in EUR, SEK and USD from the EURIBOR, STIBOR and SOFR bench - marks respectively. For EUR and SEK there is no expected change (risk of conversion) in the related floating benchmarks in the short to medium term and thus cash flow risk is not affected. The related benchmarks are currently not scheduled for termination and will therefore continue to dictate interest cash flows for floating financial assets, financial liabilities and derivatives in these currencies. Nonetheless, a switch to ESTR (EUR) and SWESTR (SEK) denominated risk-free floating - benchmarks will be a feature of the future financial landscape and may affect financial assets, financial liabilities and derivative instru - ments. Suitable instruments are already available to cater for these new benchmarks and can be implemented when the need arises. Volvo Cars expects continued 100 per cent effectiveness of related hedges and no net interest impact. Commodity price risk management Commodity price risk refers to the potential increase in material costs due to rising commodity prices in global markets. Such fluctuations can affect Volvo Cars’ cash flow and earnings. Volvo Car Group Financial Policy Framework Forecasted cash flows for the purchase of commodities for the coming 48 months can be hedged up to 70 per cent with adequate financial instruments. The hedging mandates are proposed by the treasury function and approved by the CFO. Hedging mandates shall be revised at least quarterly. Status at year end Raw materials Volvo Cars manages the risk of changes in raw material prices in forecasted consumption with futures and forwards contracts. During the year, Volvo Cars incurred costs for raw materials of approximately SEK 23,003 (21,178) m. A ten per cent change in the prices of raw materials has an impact on operating income of approximately SEK 2,300 (2,118) m, excluding hedges. Hedging is performed for forecasted consumption of metals. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 102 ===== SIDA 103 ===== Investments in interest-bearing securities are measured at fair value through the income statement and the credit risk is reflected in their fair values. The credit risk of those financial counterparties which are related parties is considered when pricing. The risk Volvo Cars is exposed to in its convertible loan receivable is reflected in its fair value. Status at year end At the end of the year, the maximum amount exposed to financial credit risk amounted to SEK 73,408 (68,402) m. This encompasses cash and cash equivalents and marketable securities SE K 57, 565 (56,373) m, convertible loan receivable SEK 9,177 (11,261) m and derivative assets SEK 6,666 (768) m. The maximum amount exposed to credit risk for financial instruments is best represented by their fair values, see table Financial instruments by category and measurement level in this note. Derivative contracts are subject to master netting agreements (ISDA), no collateral has been received or posted. The table below shows derivatives covered by master netting agreements (ISDA). Net position for derivative instruments Gross Offset in Balance sheet Net in Balance sheet Master netting agree- ments Net position 31 Dec 2025 Derivative assets 6,815 — 6,815 –690 6,125 Derivative liabilities 693 — 693 –690 3 31 Dec 2024 Derivative assets 954 — 954 –832 122 Derivative liabilities 4,137 — 4,137 –832 3,305 Commercial credit risk The commercial credit risk arises from accounts receivables. For the risk in customer and dealer financing, the objective is to have a sound and balanced credit portfolio and to engage in credit moni - toring by means of detailed procedures which include follow-up and repossession. In cases where the credit risk is considered unsatisfactory, a letter of credit or other instruments are used. The maximum amount exposed to commercial credit risk is the carrying amount of accounts receivables, see table for Financial instruments by category and measurement level in this note. For quantification of credit risk in accounts receivable, see Note 18 – Accounts receivable and other current and non-current assets. Electricity Volvo Cars manages the changes in prices for electricity by hedging the coming 48 months consumption using forward contracts. The hedging is performed for electricity usage in the European factories and is managed under an advisory contract. A 10 per cent change in the electricity spot price has an impact on the income statement of SEK 35 (28) m. Credit risk management Volvo Cars’ credit risk can be divided into financial counterparty credit risk and commercial credit risk. These risks are described in the following sections. Financial counterparty credit risk Volvo Car Group Financial Policy Framework Credit risk on financial transactions is the risk that Volvo Cars will incur losses as a result of non-payment by counterparties related to Volvo Cars’ bank accounts, interest-bearing securities, time depos - its or derivative transactions. Investments should meet the require - ments of low credit risk, high liquidity and the exposure with any single counterparty is limited. All external counterparties used for investments and derivative transactions shall have a credit rating of minimum A- (S&P or equivalent rating) and ISDA agreements are required for counterparties with which derivative contracts are traded. Limits are established according to counterparty credit rat - ing and limit usage is monitored for the Volvo Cars’ treasury coun - terparties and deposits are diversified between relationship banks. Subsidiary bank balances are diversified in order to limit credit risk. The financial counterparty credit risk regarding cash and cash equivalents is reflected in the measurement at amortised cost. The expected credit loss on these balances is considered insignificant as maturities are short and the credit quality of the counterparties is high. Volvo Cars applies the general model for assessing impairment reserve regarding time deposits recognised at amortised cost. The assessment is based on the counterparty’s credit rating, the esti - mated exposure at default, probability of default and loss given default. The impairment assessment in relation to time deposits is considered immaterial. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 103 ===== SIDA 104 ===== The table below presents the outstanding derivatives within hedge accounting. 31 Dec 2025 Nominal amount Financial assets Financial liabilities Net Ineffectiveness reflected in income statement Tax Hedge reserve after tax Recycled from other compre- hensive income Cash flow hedge – with hedge reserve Currency risk – Foreign exchange swaps and forward contracts 66,511 3,431 –265 3,166 — –630 2,536 –1,322 Commodity price risk – Raw material forward contracts 14,061 2,910 –236 2,674 –113 –551 2,010 –412 – Electricity forward contracts 310 10 –13 –3 — 1 –2 81 Interest rate risk – Interest rate swap 3,245 25 — 25 — –5 20 — Total 6,376 –514 5,862 –113 –1,185 4,564 –1,653 Net investments hedge – with hedge reserve Currency risk – EUR and USD-denominated debt 11,129 — –660 –660 — 136 –524 50 Total 6,376 –1,174 5,202 –113 –1,049 4,040 –1,603 Fair value hedge – without hedge reserve Interest rate risk – Interest rate swap 15,414 143 –57 86 –9 — — — 31 Dec 2024 Cash flow hedge – with hedge reserve Currency risk – Foreign exchange swaps and forward contracts 92,268 214 –2,160 –1,946 — 401 –1,545 681 Commodity price risk – Raw material forward contracts 15,968 229 –1,094 –865 –81 162 –622 –72 – Electricity forward contracts 462 — –112 –112 — 23 –89 4 Total 443 –3,366 –2,923 –81 586 –2,256 613 Net investments hedge – with hedge reserve Currency risk – EUR and USD-denominated debt 9,895 — –1,409 –1,409 — 290 –1,119 50 Total 443 –4,775 –4,332 –81 876 –3,375 663 Fair value hedge – without hedge reserve Interest rate risk – Interest rate swap 17,744 265 –31 234 — — — — Hedge accounting Volvo Car Group generally applies hedge accounting when hedging interest rate risk related to funding activities and when hedging future operational cash flows. Volvo Car Group also applies hedge accounting for hedges of net investments in foreign operations. The hedge strategy is to mitigate the uncertainty in future cash outflow and to reduce income statement volatility. Effectiveness testing is performed at inception of the hedging relationship and monitored regularly. The test is performed by com - paring the critical terms of the hedging instrument and the hedged item to be equal. The critical terms may be foreign currency or com - modity nominal amount, cash flows and time of maturity. If critical terms match and the credit risk of the counterparty has not changed significantly, the hedge relationship can be deemed highly effective going forward. For more information see Hedge accounting princi - ples under the section Accounting policies in this note. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 104 ===== SIDA 105 ===== The table below presents the fair value hedges by maturity date. Carrying amount 31 Dec 2025 Nominal amount Fair value, hedged item Fair value, hedging instrument Ineffectiveness reflected in income statement Derivative assets Derivative liabilities Variable benchmark Maturity date 2027 350 –52 51 –1 51 — Euribor 3m 2028 500 –27 21 –6 45 –24 Euribor 3m 2029 275 30 –33 –3 — –33 Euribor 3m 2030 300 –46 47 1 47 — Euribor 3m Total –95 86 –9 143 –57 Carrying amount 31 Dec 2024 Nominal amount Fair value, hedged item Fair value, hedging instrument Ineffectiveness reflected in income statement Derivative assets Derivative liabilities Variable benchmark Maturity date 2025 400 1 –2 –1 — –2 Euribor 3m 2027 350 –88 88 — 88 — Euribor 3m 2028 500 –53 48 –5 77 –29 Euribor 3m 2030 300 –94 100 6 100 — Euribor 3m Total –234 234 — 265 –31 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 105 ===== SIDA 106 ===== NOTE 21 EQUITY ACCOUNTING POLICIES Share-based payments Equity-settled share-based payments in connection with employee incentive plans are recognised in equity and settled using treasury shares. See Note 9 – Share-based remuneration. Group contributions and unconditional shareholders’ contributions Distributed group contributions to the main owner are recorded in equity, along with the tax effect. Group contributions received from the main owner and the tax effect on these contributions are recog - nised in equity in accordance with the principles for shareholders’ contributions. Unconditional shareholders’ contributions received from the main owner are recognised in equity. The share capital consists of 2,979,524,179 common shares of class B. Each share carries one vote. A common share of class B entitles its holder to dividend as determined by the shareholders meeting. All issued shares are fully paid. At 31 December 2025, Volvo Car Group holds 14,894,838 (5,020,194) own class B shares. In 2024, Volvo Car AB (publ.) distributed 62.7 per cent of Volvo Cars’ shareholding in Polestar Automotive Holding UK PLC to Volvo Cars’ shareholders by way of a share split (2:1), a reduction of the share capital through redemption of shares, and an increase of the share capital through a bonus issue without issuance of new shares. Due to the ownership structure of Volvo Car Group, the distribution of shares was a common control transaction. Consequently, the distribution has been accounted for at carrying values, including transaction costs recognised directly in equity. During April 2024, the share split temporarily increased the number of shares and votes by 2,979,524,179, to 5,959,048,358. In May 2024, the 2,979,524,179 new redemption shares of class B were redeemed as part of the automatic share redemption. Thereafter, the total number of shares and votes amounts to 2,979,524,179, which is the same as prior to the distribution. On 8 May 2024, the distribution of the Polestar shares was completed. For further infor- mation, see Note 12 – Investments in joint ventures and associates. Change in number of outstanding shares 31 Dec 2025 31 Dec 2024 Outstanding shares at 1 January 2,974,503,985 2,979,524,179 Share split (2:1) — 2,979,524,179 Redemption of redemption shares — –2,979,524,179 Acquisition of treasury shares –12,500,000 –6,500,000 Issue of treasury shares 2,625,356 1,479,806 Outstanding shares at 31 December 2,964,629,341 2,974,503,985 The share premium relates to issue in kind attributable to Zhejiang Geely Holding Group Co., Ltd’s acquisition in year 2010. Share pre - mium also include capital received (reduced by transaction costs) in excess of par value of issued capital. Other contributed capital consists of Group contributions from Geely Sweden Holding Group and unconditional shareholders’ con - tribution from Shanghai Geely Zhaoyuan International Investment Co., Ltd. The currency translation reserve comprises exchange rate differ- ences of hedge instruments of net investments in foreign operations and exchange rate differences resulting from the translation of financial reports of foreign operations that have prepared their financial reports in a currency other than Volvo Car Group’s report - ing currency. The parent company and Volvo Car Group present their financial reports in SEK. NOTE 20 MARKETABLE SECURITIES AND CASH AND CASH EQUIVALENTS ACCOUNTING POLICIES Marketable securities Marketable securities are highly liquid short-term interest-bearing securities and deposits that are considered easily convertible to cash and have a term of more than three months and less than one year from acquisition date. Cash and cash equivalents Cash and cash equivalents are liquid funds, deposits and short-term interest-bearing securities that are considered easily convertible to cash and have a term of three months from the date of acquisition. Marketable securities 31 Dec 2025 31 Dec 2024 Bank acceptance drafts 1 — Total 1 — Cash and cash equivalents 31 Dec 2025 31 Dec 2024 Cash at banks 26,002 39,802 Time deposits in banks 29,939 16,509 Equity repurchase agreements 1,623 — Bank acceptance drafts — 62 Total 57,564 56,373 Cash and cash equivalents includes SEK 3,329 (3,706) m where limitations exist, mainly liquid funds held in certain countries where exchange controls or other legal restrictions apply. It is not possible to immediately use the liquid funds in other parts of Volvo Cars, however there is normally no limitation for their use in the Group’s operation in the respective country. For information on financial instrument categories and fair values see Note 19 – Financial instruments and financial risks. Month Year Event Change in number of shares Total number of shares Quota value per share, SEK Change in share capital, SEK Total share capital, SEK 01 2024 At the beginning of the year — 2,979,524,179 0.02 — 60,947,709 04 2024 Share split (2:1) 2,979,524,179 5,959,048,358 0.01 — 60,947,709 05 2024 Redemption of redemption shares –2,979,524,179 2,979,524,179 0.01 –30,473,855 30,473,855 05 2024 Bonus issue — 2,979,524,179 0.02 30,473,855 60,947,709 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 106 ===== SIDA 107 ===== NOTE 22 POST-EMPLOYMENT BENEFITS ACCOUNTING POLICIES Pension benefits Volvo Car Group has various schemes for post-employment bene - fits, mainly relating to pension plans. Other benefits can in some locations include disability, life insurance and health benefits. Pension plans are classified either as defined contribution plans or defined benefit plans. Volvo Car Group has both defined contribu - tion plans and defined benefit plans for qualifying employees in some subsidiaries and the largest plans are in Sweden and Belgium. Under a defined contribution plan, Volvo Car Group pays fixed contributions into a separate external legal entity and will have no legal obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits. The contributions are recognised as employee benefit expenses in the income statement when earned by the employee. Some defined contribution plans combine the promise to make periodic payments with a promise of a guaranteed minimum return on investments. Such plans are accounted for as defined benefit plans. A defined benefit plan is a pension plan that defines the amount of post-employment benefits an employee will receive upon retire - ment, usually dependent on one or more factors such as age, years of service and compensation. For funded defined benefits plans, plan assets have been separated, with the majority invested in pen - sion foundations. The net pension provision or asset recognised on the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The calculation of the present value of defined benefit pension obligations is performed according to the Projected Unit Credit method. The calculation is performed by independent actuaries. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds, or when these are not available, government bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approxi - mating to the terms of the related pension liability. The most impor - tant actuarial assumptions are stated below. Actuarial gains and losses arising from changes in actuarial assumptions and adjustments based on experience are charged or credited to other consolidated comprehensive income in the period in which they arise. Past service costs are recognised immediately in the income statement when the settlement occurs. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. Termination benefits Termination benefits are payable when employment is terminated by Volvo Car Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. Volvo Cars recognises termination benefits at the earlier of the following dates: (a) when Volvo Cars can no longer withdraw the offer of those benefits and (b) when the entity recognises costs for a restructuring that involves payment of termination benefits. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The value of defined benefit obligations is determined through actu - arial calculations performed by independent actuaries. The calcula - tions are based on different assumptions and estimates, for instance with regards to the discount rate, future salary increases, inflation, mortality rates and demographic conditions. Changes in these assumptions affect the calculated value of the post-employee benefits obligations. The discount rate, which is the most critical assumption, is based on market return on high-quality corporate or governnent bonds that are denominated in the currency in which the benefits will be paid and with maturities corresponding to the related pension liability. A decrease in the discount rate increases the present value of post-employee benefits obligations while an increase in the discount rate has the opposite effect. Description of the substantial pension schemes within Volvo Car Group is presented below. Sweden In Sweden, Volvo Car Group has seven defined benefit retirement plans of which four are funded. The largest plan overall is the Swedish ITP 2 plan which is a collectively agreed pension plan for white collar employees. ITP 2 is a final salary-based plan. Volvo Car Group’s defined benefit plans are secured in three ways: as a provi - sion on the balance sheet, assets held in separate pension funds or The other reserve consists of the change in fair value of cash flow hedging instruments in cases where hedge accounting is applied. Retained earnings comprises net income for the year and preceding years as well as remeasurements of post-employment benefits and equity-settled share-based payments using treasury shares. Treas - ury shares are purchased own shares intended for Volvo Cars’ Per - formance Share Plans (PSP) and Employee Share Matching Plans (ESMP). The amount presented in Acquisition of treasury shares is based on the market value at acquisition date and includes trans - action costs. The amount presented in Issue of treasury shares is based on the fair value at grant date. For more information, see Note 9 – Share-based remuneration. Retained earnings also include the effects of business combina - tions under common control within the Geely group, transaction with non-controlling interests and dividend to shareholders. Non-controlling interests mainly refers to the share of equity that belongs to Zhejiang Geely Holding Group Co., Ltd without a con - trolling influence. Volvo Car Group holds 50 per cent of the equity in Daqing Volvo Car Manufacturing Co., Ltd and Shanghai Volvo Car Research and Development Co., Ltd and has the decision-making power over the operations. In the consolidated financial statements, these companies are classified as subsidiaries and fully consoli - dated with a non-controlling interest of 50 per cent. In July 2025, Volvo Car Corporation acquired the remaining 50 per cent shares in Novo Energy AB, resulting in divestment of non-controlling interest of SEK 249 m. For further information, see Note 27 – Business combinations and divestments. In August 2024, Volvo Car Corporation acquired the remaining 40 per cent shares in HaleyTek AB from ECARX Technology Co., Ltd, resulting in divestment of non-controlling interest of SEK –211 m. In October 2024, the non-controlling interest increased through a capital contribution to VCLC Services AB of SEK 3 m from Lynk & Co International AB. At year end 2025, non-controlling interests amounted to SEK 1,299 (4,738) m. Summarised financial information on subsidiaries with non-controlling interest is presented in Note 8 – Participation in subsidiaries (Parent company). Total equity consists of the equity attributable to the owners of the parent company and non-controlling interests. At year end 2025, the total equity amounted to SEK 148,378 (142,199) m. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 107 ===== SIDA 108 ===== funded through insurance payments. The “funded through insur - ance payments” plans are defined benefit plans accounted for as defined contribution plans. In Sweden, these plans are secured with the mutual insurance company Alecta. The portion secured through insurance with Alecta refers to a defined benefit plan that comprises several employers and is reported according to a pronouncement by the Swedish Corporate Reporting Board, UFR 10. For 2025, Volvo Car Group did not have access to the information to report its proportionate share of the plan's obligations, assets under management and cost, that would make it possible to report this plan as a defined benefit plan. Volvo Cars estimates payments of premiums of about SEK 172 m to Alecta in 2026. Volvo Car Group's share of the total saving premiums for ITP2 in Alecta as at 31 December 2025 amounted to 0.48 (0.41) per cent and Volvo Car Group's share of the total number of active policy holders amounted to 1.43 (1.40) per cent. The collective consolidation level comprises the market value of Alecta's assets as a percentage of the insurance obligations calcu - lated in accordance with Alecta's actuarial methods and assump - tions, which do not conform to IAS 19. The collective funding ratio is normally allowed to vary between 125 and 175 per cent. If the con - solidation level falls short or exceeds the normal interval one meas - ure may be to increase the contract price for new subscriptions and expanding existing benefits or introduce premium reductions. At year end 2025, the consolidation level amounted to 168 (162) per cent. In case local legal requirements exist, funded or unfunded plans are credit insured with an external party. Belgium In Belgium, Volvo Car Group has three retirement − indemnity plans which are all funded. All three are based on the Collective Labour Agreement applicable to the company. The pension plan for white collar employees and the closed plan for blue collar employees who were in service before 2009 are defined benefit plans. The benefits are based on the final salary and seniority within the company. The pension plan for blue collars who are in service as from 2009 is a cash balance plan. The pension obligations are secured through a transfer of the required funds to a separate pension fund. The fund - ing of the obligations under these defined benefit and cash balance plans is fully externalised through a number of pension funds and through insurance contracts. Total of which Sweden of which Belgium Total of which Sweden of which Belgium Financial year ending on 31 Dec 2025 31 Dec 2025 31 Dec 2025 31 Dec 2024 31 Dec 2024 31 Dec 2024 Amounts recognised in the statement of financial position Defined benefit obligation 24,559 18,179 3,891 26,921 19,865 4,210 Fair value of plan assets 18,706 13,302 3,564 18,810 12,907 3,837 Funded status 5,853 4,877 327 8,111 6,958 373 Net provision (asset) as recorded on the balance sheets 5,853 4,877 327 8,111 6,958 373 Principal actuarial assumptions Weighted average assumptions to determine benefit obligations Discount rate, % 4.08 3.95 4.05 3.67 3.55 3.39 Rate of salary increase, % 3.11 3.15 2.94 3.35 3.40 3.15 Rate of price inflation, % 1.86 1.75 2.00 2.06 2.00 2.00 Rate of pension indexation, % 1.83 1.75 N/A 2.06 2.00 N/A The actuarial assumptions are the most significant assumptions applied when calculating the value of a defined benefit pension plan. Volvo Car Group determines the discount rate based on AA-rated corporate bonds and mortgage bonds that match the duration of the obligations. If no such corporate bonds and mort - gage bonds are available, government bonds are used. In Sweden, as in prior years, mortgage bonds are used. Inflation assumptions are based on a combination of central banks targets, implicit market expectations and long-term analyst forecasts. Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and experience in each territory. Mortality assumptions for Sweden are based on the DUS23 (white collar) mortality study, and the DUS23 (white collar) mortality table is generational. Mortality assumptions in Belgium are not as significant, since there are lump sum payments. The actuarial assumptions are reviewed annually by Volvo Car Group and modified when deemed appropriate to do so. In Belgium, Volvo Car Group also has early retirement arrangements (termination benefits − bridge plans) as well as seniority premiums (other long-term benefits). The early retirement arrangements are unfunded and the seniority premiums are funded. Summary of provision for post-employment benefits The provisions for post-employment benefits have been recognised on the balance sheet as follows: 31 Dec 2025 31 Dec 2024 Post-employment benefits 5,853 8,111 Other provisions (Note 23) 367 363 Closing balance 6,220 8,474 The tables below show Volvo Car Group's provision for post- employment benefits, the assumptions used to calculate the value of these provisions and the plan assets related to these provisions, as well as the amounts recognised in the income statement. Volvo Car Group's reported pension provision amounts to SEK 6,220 (8,474) m in total, which includes endowment insurances and similar undertakings amounting to SEK 367 (363) m in respect of defined premium pension plans in Sweden. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 108 ===== SIDA 109 ===== Total of which Sweden of which Belgium Total of which Sweden of which Belgium Financial year ending on 31 Dec 2025 31 Dec 2025 31 Dec 2025 31 Dec 2024 31 Dec 2024 31 Dec 2024 Change in defined benefit obligation Defined benefit obligation at end of prior year 26,921 19,865 4,210 25,116 18,220 4,092 Service cost 838 646 150 636 438 154 Interest expense 949 697 128 880 621 135 Cash flows –1,030 –492 –377 –951 –458 –361 Remeasurements –2,597 –2,537 10 944 1,044 72 Effect of changes in foreign exchange rates –522 — –230 296 — 118 Defined benefit obligation at end of year 24,559 18,179 3,891 26,921 19,865 4,210 Change in fair value of plan assets Fair value of plan assets at end of prior year 18,810 12,907 3,837 17,506 11,918 3,594 Interest income 681 458 121 630 411 123 Cash flows –195 — –107 –185 — –109 Remeasurements –137 –63 –77 598 578 124 Effect of changes in foreign exchange rates –453 — –210 261 — 105 Fair value of plan assets at end of year 18,706 13,302 3,564 18,810 12,907 3,837 Components of defined pension cost Service cost 838 646 150 636 438 154 Net interest cost 269 238 6 250 210 12 Remeasurements of Other long-term benefits –55 — –56 43 — 42 Administrative expenses and taxes 35 — 31 36 — 32 Total pension cost for defined benefit plans 1,087 884 131 965 648 240 Pension cost for defined contribution plans 4,600 3,809 385 4,348 3,489 381 Total pension cost recognised in P&L 5,687 4,693 516 5,313 4,137 621 Remeasurements (recognised in other comprehensive income) –2,403 –2,474 144 312 466 –96  Effect of changes in demographic assumptions 518 — 515 –33 — —  Effect of changes in financial assumptions –2,840 –2,346 –411 –475 –377 31  Effect of experience adjustments –220 –191 –38 1,409 1,421 –2  Return on plan assets (excluding interest income) 139 63 78 –589 –578 –125 Total defined benefit cost recognised in P&L and OCI –1,316 –1,590 275 1,277 1,114 144 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 109 ===== SIDA 110 ===== Total of which Sweden of which Belgium Total of which Sweden of which Belgium Financial year ending on 31 Dec 2025 31 Dec 2025 31 Dec 2025 31 Dec 2024 31 Dec 2024 31 Dec 2024 Net defined benefit provision (asset) reconciliation Net defined benefit provision (asset) 8,111 6,958 373 7,610 6,302 498 Defined benefit cost included in the income statement 1,087 884 131 965 648 240 Total remeasurements included in OCI –2,403 –2,474 144 312 466 –96 Cash flows –872 –491 –301 –810 –458 –283  Employer contributions –306 — –274 –290 — –260  Employer direct benefit payments –566 –491 –27 –520 –458 –23 Effect of changes in foreign exchange rates –70 — –20 34 — 14 Net defined benefit provision (asset) as of end of year 5,853 4,877 327 8,111 6,958 373 Defined benefit obligation by participant status Actives 12,340 8,558 3,211 13,834 9,784 3,378 Vested deferreds 5,430 4,078 580 6,018 4,500 643 Retirees 6,789 5,543 100 7,069 5,581 189 Total 24,559 18,179 3,891 26,921 19,865 4,210 Plan assets of which with a quoted market price Fair value of plan assets 2025 2024 2025 2024 Cash and cash equivalents 368 469 359 325 Equity instruments 1,022 1,698 945 1,109 Debt instruments 5,834 8,093 4,938 7,291 Real estate 1,202 828 84 86 Investment funds 8,258 5,725 6,876 5,565 Other 2,022 1,997 38 219 Total 18,706 18,810 13,240 14,595 Responsibility for the management of several pension plans rest with Volvo Car Group and therefore pension trusts have been set up in different countries. The assets are held by long-term employee benefit trusts that are legally separated from Volvo Car Group. The assets are available to fund employee benefits only. Sweden, Belgium and United Kingdom have the largest pension trusts. The assets of the pension trusts are managed in accordance with a capital preservation strategy where the risk exposure is adjusted accordingly. The investment strategies are long-term and the distribution of assets ensures that investment portfolios are well diversified. The capital is managed in accordance with the invest - ment policies of each pension trust. Continuous monitoring is performed by the trustees to ensure that capital is allocated and managed according to the investment policies. In Sweden the minimum funding level is decided by PRI Pensionsgaranti. The actual return on plan assets amounts to SEK 543 (1,228) m. Risks There are mainly three categories of risks related to defined benefit obligations and pension plans. The first category relates to risks affecting the actual pension payments. Increased longevity and inflation of salary and pensions are the principal risks that may increase the future pension payments and hence, increase the pen - sion obligation. The second category relates to investment return. Pension plan assets are invested in a variety of financial instruments and are exposed to market fluctuations. Poor investment return may reduce the value of investments and render them insufficient to cover future pension payments. The final category relates to the discount rate used for measuring the obligation and the plan assets. The discount rate used for measuring the present value of the obli - gation may fluctuate which impacts the valuation of the defined benefit obligation. The discount rate also impacts the value of the interest income and expense that is reported in the financial items and the service cost. The risk related to pension obligations, i.e. mortality exposure, discount rate and inflation, are monitored on an ongoing basis. Sensitivity analysis on defined benefit obligation Sweden Belgium Discount rate +0.5% –1,612 –142 Discount rate –0.5% 1,803 158 Inflation rate +0.5 % 1,825 140 Inflation rate –0.5% –1,639 –129 The weighted average duration of the obligation is 19.5 years for Sweden and 8.0 years for Belgium. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 110 ===== SIDA 111 ===== NOTE 23 CURRENT AND OTHER NON–CURRENT PROVISIONS ACCOUNTING POLICIES Provisions Provisions are recognised on the balance sheet when a legal or con - structive obligation exists as a result of a past event, it is deemed more likely than not that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are typically settled within 2–3 years. Warranties Warranty provisions include Volvo Car Group’s cost of satisfying the customers with specific contractual warranties, as well as other costs not covered by standard contractual commitments. All war - ranty provisions are recognised at the sale of the vehicles or spare parts. The initial calculations of the reserves are based on historical warranty statistics considering known quality improvements, costs for remedy of defaults etc. The warranty provision booked at point of sale is adjusted as campaign decisions for specific quality prob - lems are made. On a quarterly basis the provisions are adjusted to reflect latest available data such as actual spend, exchange rates, discount rates etc. The provisions are reduced by virtually certain warranty reimbursements from suppliers. Generally, warranty provi - sions are settled within 2–4 years, provisions for battery warranties are typically settled within 8 years. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Provisions The amount recognised as provision is the best estimate of the expenditure required to settle the present obligation at the balance sheet date. Provisions are regularly reviewed and adjusted as further information becomes available or circumstances change. If the effect of the time value of money is material, non-current provisions are recognised at present value by discounting the expected future cash flows at a pre-tax rate reflecting current market assessments of the time value of money. The discount rate does not reflect such risks that are taken into consideration in the estimated future cash flow. Revisions of estimated cash flows, both amount and likelihood, are recognised as operating cost. Warranties Other provisions 1) Total Balance at 1 January 2024 11,122 9,577 20,699 Provided for during the year 14,185 12,739 26,924 Utilised during the year –10,390 –13,740 –24,130 Reversal of unutilised amounts –3,154 –61 –3,215 Translation differences 452 150 602 Balance at 31 December 2024 12,215 8,665 20,880 Of which current 3,865 7,514 11,379 Of which non-current 8,350 1,151 9,501 Warranties Other provisions 1) Total Balance at 1 January 2025 12,215 8,665 20,880 Provided for during the year 14,771 17,385 32,156 Utilised during the year –10,886 –17,948 –28,834 Reversal of unutilised amounts –4,220 –1,485 –5,705 Translation differences –1,268 –345 –1,613 Balance at 31 December 2025 10,612 6,272 16,884 Of which current 3,215 5,141 8,356 Of which non-current 7,397 1,131 8,528 1) Other provisions include personnel related provisions of SEK 746 (2,650) m. Changes to present value due to the passage of time and revisions of discount rates to reflect prevailing current market conditions are recognised as a financial cost. There is always a risk for changing governmental regulations and changes in environmental policies affecting our business as well as accounting estimates and judgements related to climate regulation. Based on our performance to date, current product and volume plans and current knowledge of global emissions regulations, Volvo Car Group does not foresee any significant financial risks or judg - mental accounting issues short to mid-term related to not meeting global, regional or national CO 2 emissions regulations. Warranties The recognition and measurement of provisions for product warran - ties is generally connected with estimates. Estimated costs for product warranties are charged to cost of sales when the products are sold. Estimated warranty costs include contractual warranty, warranty campaigns (recalls and buy-backs) and coverage in excess of contractual warranty or campaigns, which is accepted as a matter of policy or normal practice in order to maintain a good business relation with the customer. Warranty provisions are estimated based on historical claims statistics and the warranty period. Quality index improvements based on historical patterns have been reflected in all categories of warranty. Refunds from suppliers that decrease Volvo Car Group’s warranty costs are recognised to the extent these are considered to be virtually certain, based on historical experi - ence. Supplier recovery provisions amount to SEK 2,523 (2,453) m, excluding supplier recovery related to EX30 battery cells. EX30 recall On 30 December 2025, Volvo Cars issued a precautionary safety notice relating to a potential issue in certain EX30 battery cells. At the end of the year and at the date of the release of the interim report for the fourth quarter, the assessment of affected vehicles, the appropriate remediation measures and the related cost implica - tions was still ongoing. Due to these uncertainties, it was not possi - ble to make a reliable estimate of any potential obligation or any OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 111 ===== SIDA 112 ===== NOTE 24 OTHER CURRENT AND NON-CURRENT LIABILITIES Other non–current liabilities 31 Dec 2025 31 Dec 2024 Liabilities related to repurchase commitments 3,113 3,107 Other liabilities 3,601 2,191 Total 6,714 5,298 Other current liabilities 31 Dec 2025 31 Dec 2024 Accrued expenses and prepaid income 19,645 23,110 Liabilities related to repurchase commitments 15,367 14,134 Personnel related liabilities 5,946 7,154 VAT liabilities 3,364 5,172 Other liabilities 3,745 3,750 Total 48,067 53,320 NOTE 25 CONTINGENT LIABILITIES AND PLEDGED ASSETS ACCOUNTING POLICIES When a possible obligation does not meet the criteria for recogni - tion as a liability it may be disclosed as a contingent liability. These possible obligations derive from past events and their existence will be confirmed only when one or several uncertain future events, which are not entirely within Volvo Car Group’s control, take place or fail to take place. A contingent liability could also exist for a present obligation, due to a past event, where an outflow of resources is less likely (<50 per cent) or when the amount of the obligation cannot be reliably measured. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Legal proceedings Companies within Volvo Car Group may at times be involved in legal proceedings, such proceedings may cover a range of different mat - ters in various jurisdictions. These include, but are not limited to, commercial disputes such as alleged breach of contract, insufficient supplies of goods or services, product liability, patent infringement or infringement of other intangible rights. The various matters raised are often of a difficult and complex nature making them legally complicated, and it is therefore difficult to predict the final outcome of such matters. The companies within Volvo Car Group work closely with legal advisors and other experts in the various matters in each jurisdiction. A provision is made when it is deter - mined that an adverse outcome is more likely than not, and the amount of the loss can be reliably estimated. In instances where these criteria are not met, a contingent liability has been disclosed provided the risk qualifies as such a liability. Other processes Volvo Car Group is as well, like other global companies, from time to time involved in processes of varying scope and in various stages with regards to for instance import duties and transfer prices. These processes are evaluated regularly, and provisions are made when it is more likely than not that additional fees must be paid, and the outcome can be reliably estimated. If it is not probable that the additional fees will be paid but the risk is more than remote, such amounts are disclosed as contingent liabilities. Contingent liabilities 31 Dec 2025 31 Dec 2024 Guarantees to insurance company FPG 291 278 Legal claims 50 19 Other claims 1) 289 231 Guarantee commitments 9 9 Other contingent liabilities 2)3) 143 3,433 Total 782 3,970 1) In addition to the contingent liabilities related to other claims there is also tax related contingent assets amounting to SEK — (54 ) m. 2) On 19 November 2024, Volvo Cars entered into an operational agree - ment that included a purchase option for an entity domiciled in the UK. This purchase option expired on August 31, 2025. Subsequently, on 20 November 2024, Volvo Cars entered into a related agreement guaranteeing the outstanding loans of the target entity. This guaran - tee was contingent upon the lenders electing to transfer these loans to Volvo Cars. The maximum exposure under this financial guarantee was estimated to SEK 3,240 m. On 25 April 2025, Volvo Cars exer - cised its purchase option and made a payment of SEK 2,727 m under the financial guarantee arrangement relating to the loans of the UK entity it acquired. Volvo Cars has no contingent liabilities or other liabilities outstanding as at reporting date. 3) Apart from the above contingent liabilities, there are other commit - ments and guarantees that are not recognised since the likelihood of an outflow of resources is very low. Pledged assets 31 Dec 2025 31 Dec 2024 Restricted cash 42 195 Inventory 374 439 Floating charges 54 72 Other pledged assets 904 486 Total 1,374 1,192 NOTE 26 CASH FLOW STATEMENTS 2025 2024 Adjustments for other non-cash items: Capital gains/losses on sale of tangible and intangible assets 6,518 1,574 Share of income in joint ventures and associates –654 4,722 Interest effect from the measurement of repurchase obligations –132 –797 Provision for variable pay 102 2,163 Other provisions 6,968 –695 Deferred revenue –3,570 –1,779 Reclassification of residual value guarantee –693 –1,364 Inventory impairment 766 549 Elimination of intra-group profit –493 –186 IFRS16 adjustments –5,807 –1,450 Negative goodwill of NOVO Energy AB — –1,054 Other non-cash items 3,276 1,071 Total 6,281 2,754 related supplier recovery receivable. Consequently, Volvo Cars did not recognise any provision or supplier recovery receivable as of year-end. As the investigation progressed during 2026 and additional information became available before finalising this annual report, management was able to determine the expected remediation actions. The estimated costs are still subject to final assessment but are expected to be fully recovered from the supplier. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 112 ===== SIDA 113 ===== Cash flows Non-cash changes Change in net cash 1 Jan 2024 Reclassifi- cations Foreign exchange movement Fair value changes Other non-cash changes 31 Dec 2024 Cash and cash equivalents 47,861 7,043 — 1,469 — — 56,373 Marketable securities 9,918 –10,269 — 351 — — — Liabilities to credit institutions, non-current –4,562 –199 947 –122 — 51 –3,885 Bonds, non-current 1) –18,121 –5,857 5,618 –246 — 16 –18,590 Bonds, current 1) –6,672 6,935 –5,618 –367 — –1 –5,723 Other interest-bearing non-current liabilities — — — — — — — Liabilities to credit institutions, current –937 862 –947 –41 — 3 –1,060 Net cash 27,487 –1,485 — 1,044 — 69 27,115 Change in net cash 1 Jan 2025 31 Dec 2025 Cash and cash equivalents 56,373 4,177 — –2,986 — — 57,564 Marketable securities — 1 — — — — 1 Liabilities to credit institutions, non-current –3,885 –4,947 761 1,350 — –2 –6,723 Bonds, non-current 1) –18,590 –5,476 1,500 1,013 — 4 –21,549 Bonds, current 1) –5,723 5,732 –1,500 –8 — –1 –1,500 Other interest-bearing non-current liabilities — — — — — — — Liabilities to credit institutions, current –1,060 1,631 –761 –732 — — –922 Net cash 27,115 1,118 — –1,363 — 1 26,871 1) The bonds are presented above at amortised cost. The fair value risk of the EUR-denominated bonds is hedged, and the bonds with fixed interest pay - ments have been swapped into floating interest payments. Consequently, a portion of the bonds is therefore measured at fair value through the income statement, while the remaining part is measured at amortised cost. On 31 December 2025, the fair value component amounted to SEK 96 (235) m. NOTE 27 BUSINESS COMBINATIONS AND DIVESTMENTS ACCOUNTING POLICIES Acquisitions Companies are consolidated as of the date of acquisition when Volvo Car Group obtains control. In a business combination Volvo Car Group measures all acquired identifiable assets and liabilities at fair value. Any surplus amount from the purchase consideration, possible non-controlling interest and fair value of previously held equity interests at the acquisition date compared to Volvo Car Group’s share of acquired net assets is recognised as goodwill. Any deficit amount (i.e. negative goodwill) resulting from a bargain purchase, is recognised directly as a gain in the income statement. In step acquisitions, a business combination occurs only on the date control is achieved. Transactions with non-controlling interest are recognised within equity as long as control of the subsidiary is retained. In acquisitions that involve parties under common control Volvo Car Group applies predecessor accounting, meaning that the acquirer consolidates the predecessors’ respective carrying values for assets and liabilities. These are the carrying values that are related to the acquired entity from the consolidated financial state - ments of the highest entity that has common control, and for which consolidated financial statements are prepared. Any difference between the cost of the combination (i.e. the fair value of the con - sideration paid) and the carrying values for assets and liabilities is recognised directly in equity within retained earnings. All acquisition-related transaction costs are expensed. Divestments Companies that have been divested are included in the consolidated financial statements up to and including the date when Volvo Car Group loses control. In divestments that involve parties under common control, any difference between the cost of the divestment (i.e. the fair value of the consideration received) and the carrying values for assets and liabilities is recognised directly in equity within retained earnings. Business combinations NOVO Energy AB On 30 October 2024, Volvo Car Corporation assessed it had gained control of NOVO Energy AB from an accounting perspective follow - ing the notification to Northvolt AB of Volvo Cars intent to redeem Northvolt AB’s 50 per cent shareholdings in NOVO Energy AB. On 4 July 2025, Volvo Car Corporation finalised the acquisition of Northvolt AB’s shares in NOVO Energy AB and became 100% share - holder of NOVO Energy AB. As a consequence, the non-controlling interest of 50 per cent ceased. Purchase consideration amounted to SEK 40 m. The preliminary acquisition analysis previously recog - nised for NOVO Energy AB was adopted in 2025. Apart from the parent company NOVO Energy AB, NOVO Energy Group consists of the wholly-owned subsidiaries NOVO Energy R&D AB and NOVO Energy Production AB with its wholly-owned subsidi - ary NOVO Energy PropCo AB. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 113 ===== SIDA 114 ===== NOTE 28 SEGMENT REPORTING ACCOUNTING POLICIES Volvo Car Group is considered to have one operating segment. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Critical judgements in the determination of Volvo Car Group having one operating segment relates to the level of integration across the different functions of the Group, the identification of the Chief operating decision-making body and how resources are allocated. The activities that the automotive business engage in relates to development, design, manufacturing, assembly and sale of vehicles, as well as sale of related parts and accessories from which Volvo Cars derives its revenues. All of the activities of the Group are not managed individually but globally on a highly integrated basis. Volvo Car Group is managed by the Executive Management Team (EMT) with 8 (8) members, led by the CEO and overseen by the Board of Directors. EMT take all significant operating decisions and members of EMT have the responsibility for implementing the deci - sions in their respective areas. The operating decision-making is at EMT level as a whole, however Volvo Car Group considers the CEO to the be Chief operating decision maker as the CEO has the ability to override decisions made by the EMT. All substantial decisions regarding allocation of resources as well as the assessment of per - formance is based on Volvo Car Group as a whole. Therefore, Volvo Car Group is considered to have only one operating segment. Sweden China Rest of the world Total 31 Dec 2025 Non-current assets 1) 141,780 17,195 34,601 193,576 31 Dec 2024 Non-current assets 1) 135,885 23,861 44,419 204,165 1) Excluding deferred tax assets and financial instruments. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 114 ===== SIDA 115 ===== Gross margin Gross margin is defined as gross income as a percentage of revenue. Gross margin presents the per cent of revenue that Volvo Cars retains after incurring the direct costs associated with producing the goods and services sold. Gross margin excl. items affecting comparability Gross margin excl. items affecting comparability is defined as gross margin adjusted for items affecting comparability. This presents the per cent of revenue that Volvo Cars retains from the underlying operations after incurring the direct costs associated with produc - ing the goods and services sold. Items affecting comparability Transactions that are not related to recurring business operations, but affecting the financial outcome in a material way, and where the probability of reoccurrence over the coming years is limited. EBIT EBIT is defined as net income excluding financial income, financial expenses and Income taxes, that is operating income presented in the income statement. EBIT presents the operating income of Volvo Car Group. EBIT margin EBIT margin is defined as EBIT as a percentage of revenue. The EBIT margin presents the profitability of the operation in relation to the recognised revenue earned by Volvo Car Group during the account - ing period. EBIT excl. share of income in JVs & associates EBIT excl. share of income in JVs & associates is defined as EBIT less the result from share of income in JVs & associates. This presents the profitability of the operation excluding share of income in JVs & associates during the accounting period. EBIT excl. items affecting comparability EBIT excl. items affecting comparability is defined as EBIT adjusted for items affecting comparability. This presents the profitability of the underlying operations that can be used in making comparisons between reporting periods. EBIT margin excl. share of income from JVs & associates EBIT margin excl. share of income in JVs & associates is also pre - sented as a percentage of revenue. The margin presents the profita - bility of the operation excluding share of income in JVs & associates in relation to the recognised revenue earned by Volvo Car Group during the accounting period. EBIT margin excl. items affecting comparability EBIT margin excl. items affecting comparability is defined as EBIT excl. items affecting comparability as a percentage of revenue. The EBIT margin excl. items affecting comparability presents the profitability of the underlying operation in relation to the recognised revenue earned by Volvo Car Group during the accounting period and can be used in making comparisons between reporting periods. The alternative performance measures presented and disclosed in this annual report are used internally by management in conjunction with IFRS measures to measure performance and make decisions regarding the future direction of the business. The Group believes that these alternative performance measures, when provided in combination with reported IFRS measures, provide helpful supplementary information for investors. These alternative performance measures are not a substitute for or superior to IFRS measures and should be used in conjunction with reported IFRS measures. Further, these alternative performance measures, as defined by the Group, may not be comparable to other similarly titled measures used by other groups. For general definitions, see page 226. Volvo Cars has applied the guidelines from ESMA (European Securities and Markets Authority) regarding alternative key figures (APMs, Alternative performance measures). Although these key figures are not defined or specified according to IFRS they provide the valuable supplementary information to investors and the company’s management regarding the company’s performance. Alternative performance measures presented by Volvo Car Group EBITDA EBITDA is defined as EBIT excluding depreciation, amortisation and impairment of non-current assets. EBITDA presents an overview of the profitability of Volvo Car Group operations. EBITDA margin EBITDA margin is EBITDA as a percentage of revenue. The EBITDA margin presents the profitability of the operation in relation to the recognised revenue earned by the Group during the accounting period. Free cash flow Free cash flow is defined as the sum of cash flow from operating activities and cash flow from investing activities. This represents the operational cash flow for Volvo Cars minus the total investment spend and is the amount that Volvo Cars can choose to either consolidate, pay down debt or distribute to the shareholders. Return on invested capital, ROIC ROIC is defined as EBIT divided by invested capital. Return on invested capital ratio gives an overview of how efficient Volvo Car Group is at allocating capital to profitable investments. Invested capital is the amount of net assets needed in day to day operations (total assets less receivables on parent company less other long- term securities holding less cash and cash equivalents less marketable securities plus operating cash (average two-year revenue*10%) less total current liabilities less current liabilities to parent company plus total current interest-bearing liabilities (including liabilities to credit institutions, bonds current, other current interest-bearing liabilities) calculated on two-year average figures. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 115 VOLVO CAR GROUP  / FINANCIALS / ALTERNATIVE PERFORMANCE MEASURES ===== SIDA 116 ===== Equity ratio The equity ratio is defined as total equity divided by total assets on the balance sheet. This measures the Volvo Car Group’s long-term solvency and financial leverage level. Net cash Net cash is defined as cash, cash equivalents and marketable securities less liabilities to credit institutions and bonds. Net cash represents Volvo Car Group’s ability to meet its financial obligations. Liquidity Liquidity is defined as cash, cash equivalents, undrawn credit facilities and marketable securities. Invested capital Invested capital is defined as total assets less receivables from parent company, other long-term security holdings, cash and cash equivalents, marketable securities, operating cash, total current liabilities, current liabilities to parent company and total current interest-bearing liabilities. It is calculated using a two-year average. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 116 VOLVO CAR GROUP  / FINANCIALS / ALTERNATIVE PERFORMANCE MEASURES ===== SIDA 117 ===== RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASURES 2025 2024 Revenue 357,263 400,234 Cost of sales –297,042 –320,821 Research and development expenses –26,067 –16,983 Operating income, EBIT 303 22,318 EBIT margin, excl. share of income from JVs & associates –351 27,040 EBIT excl. Items affecting comparability 12,556 24,020 Net income –2,968 15,934 EBITDA 35,679 45,048 Gross margin, % 16.9 19.8 Gross margin, excl. Items affecting comparability, % 18.0 19.8 EBIT margin, % 0.1 5.6 EBIT margin, excl. share of income from JVs & associates, % –0.1 6.8 EBIT margin excl. Items affecting comparability, % 3.5 6.0 EBITDA margin, % 10.0 11.3 Equity ratio, % 39.8 36.6 Net cash 26,871 27,115 Return on invested capital, ROIC % 0.2 12.0 Operating income, EBIT/EBIT margin, % 2025 2024 Operating income, EBIT 303 22,318 Revenue 357,263 400,234 EBIT margin, % 0.1 5.6 EBIT and EBIT margin, excl. share of income from JVs & associates, % 2025 2024 Operating income, EBIT 303 22,318 Share of income from JVs & associates 654 –4,722 EBIT excl. share of income from JVs & associates –351 27,040 Revenue 357,263 400,234 EBIT margin, excl. share of income from JVs & associates, % –0.1 6.8 EBIT and EBIT margin excl. Items affecting comparability, % 2025 2024 Operating income, EBIT 303 22,318 Impairment charge for the EX90 and ES90 platform 11,431 — Restructuring costs 822 — Impairment of JV-shareholding in NOVO Energy AB — 1,702 EBIT, excl. Items affecting comparability 12,556 24,020 Revenue 357,263 400,234 EBIT margin, excl. Items affecting comparability, % 3.5 6.0 EBITDA/EBITDA margin, % 2025 2024 Operating income, EBIT 303 22,318 Depreciation and amortisation of non-current assets 35,376 22,730 EBITDA 35,679 45,048 Revenue 357,263 400,234 EBITDA margin, % 10.0 11.3 Gross margin, % 2025 2024 Gross income 60,221 79,413 Revenue 357,263 400,234 Gross margin, % 16.9 19.8 Gross margin, excl. Items affecting comparability, % 2025 2024 Gross income 60,221 79,413 Impairment charge for the EX90 and ES90 platform 3,982 — Restructuring costs 82 — Gross income, excl. Items affecting comparability 64,285 79,413 Revenue 357,263 400,234 Gross margin, excl. Items affecting comparability, % 18.0 19.8 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 117 VOLVO CAR GROUP  / FINANCIALS / ALTERNATIVE PERFORMANCE MEASURES ===== SIDA 118 ===== Operating cash 2025 2024 Average two-year revenue ×10% 37,875 39,979 Operating cash 37,875 39,979 Invested capital 1) 2025 2024 Total assets 380,704 372,298 Receivables from parent company — — Other long-term securities holdings –11,604 –12,410 Cash and cash equivalents –56,969 –52,117 Marketable securities –1 –4,959 Operating cash 37,875 39,979 Total current liabilities –160,419 –165,290 Current liabilities to parent company — — Total current interest-bearing liabilities 2,030 9,056 Total invested capital 191,617 186,557 1) Calculated on two-year average figures. Return on invested capital, ROIC, % 2025 2024 EBIT (last 12 months) 303 22,318 Invested capital 191,617 186,537 Return on invested capital, ROIC, % 0.2 12.0 Equity ratio 31 Dec 2025 31 Dec 2024 Total equity 148,378 142,199 Total assets 373,172 388,235 Equity ratio, % 39.8 36.6 Net cash 31 Dec 2025 31 Dec 2024 Cash and cash equivalents 57,564 56,373 Marketable securities 1 — Liabilities to credit institutions, non-current –6,723 –3,885 Bonds, non-current2) –21,549 –18,590 Other interest-bearing liabilities — — Liabilities to credit institutions, current –922 –1,059 Bonds, current2) –1,500 –5,724 Net cash 26 871 27,115 2) The bonds are presented above at amortised cost. The fair value risk of the EUR-denominated bonds is hedged, and the bonds with fixed interest payments have been swapped into floating interest payments. Consequently, a portion of the bonds is therefore measured at fair value through the income statement, while the remaining part is measured at amortised cost. On 31 December 2025, the fair value component amounted to SEK 95 (235) m. Liquidity 31 Dec 2025 31 Dec 2024 Cash and cash equivalents 57,564 56,373 Undrawn credit facilities 23,256 32,176 Marketable securities 1 — Liquidity 80,821 88,549 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 118 VOLVO CAR GROUP  / FINANCIALS / ALTERNATIVE PERFORMANCE MEASURES ===== SIDA 119 ===== Note 2025 2024 Administrative expenses 4, 5 –38 –41 Operating loss –38 –41 Income from participation in subsidiaries 3 3,200 6,525 Interest income and similar credits 3 1,421 1,587 Interest expenses and similar charges –1,006 –1,011 Other financial income and expenses 6 –28 –25 Income before tax 3,549 7,035 Income tax 7 806 –583 Net income 4,355 6,452 Other comprehensive income and Net income are consistent since there are no items in other comprehensive income. Income Statements and Comprehensive Income – Parent Company Note 31 Dec 2025 31 Dec 2024 ASSETS Non-current assets Participation in subsidiaries 8 22,433 18,103 Deferred tax assets 7 3,146 2,340 Receivables from Group companies 3 24,219 21,758 Total non-current assets 49,798 42,201 Current assets Receivables from Group companies 3 22,062 22,780 Other current assets 79 93 Cash and cash equivalents 6 1 Total current assets 22,147 22,874 TOTAL ASSETS 71,945 65,075 Balance Sheets – Parent Company Note 31 Dec 2025 31 Dec 2024 EQUITY & LIABILITIES Equity 9 Restricted equity Share capital 61 61 61 61 Non-restricted equity Share premium reserve 31,654 31,654 Retained earnings 5,083 –1,222 Net income 4,355 6,452 41,092 36,884 Total equity 41,153 36,945 Non-current liabilities Bonds 10 21,549 18,590 Liabilities to credit institutions 10 2,568 3,075 Total non-current liabilities 24,117 21,665 Current liabilities Bonds 10 1,500 5,724 Liabilities to credit institutions 10 393 208 Liabilities to Group companies 3 4,267 4 Accounts payable — 3 Accrued expenses and prepaid income 515 526 Total current liabilities 6,675 6,465 TOTAL EQUITY & LIABILITIES 71,945 65,075 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 119 VOLVO CAR GROUP  / FINANCIALS / PARENT COMPANY FINANCIAL STATEMENTS ===== SIDA 120 ===== Restricted equity Non-restricted equity Share capital 1) Share premium reserve Other contributed capital Retained earnings Total Balance at 1 January 2024 61 31,654 –3,500 11,690 39,905 Net income for the year — — — 6,452 6,452 Transactions with owners Distribution of shares –30 — — –9,276 –9,306 Bonus issue 30 — — –30 — Acquisition of treasury shares — — — –190 –190 Issue of treasury shares — — — 67 67 Share-based payments — — — 17 17 Transactions with owners — — — –9,412 –9,412 Balance at 31 December 2024 61 31,654 –3,500 8,730 36,945 Net income for the year — — — 4,355 4,355 Transactions with owners Distribution of shares — — — 2 2 Acquisition of treasury shares — — — –219 –219 Issue of treasury shares — — — 126 126 Share-based payments — — — –56 –56 Transactions with owners — — — –147 –147 Balance at 31 December 2025 61 31,654 –3,500 12,938 41,153 1) Share capital amounts to SEK 60 947 709 (60,947,709) Statement of Changes in Equity – Parent Company Statement of Cash Flows – Parent Company Note 2025 2024 OPERATING ACTIVITIES Operating income –38 –41 Interest received 1,428 1,512 Interest paid –1,020 –936 Other adjustments for non-cash items –2 –89 368 446 Movements in working capital Change in current receivables Group companies 3 –5,853 11,973 Change in current receivables 14 –67 Change in current liabilities Group companies 3 1 3 Change in liabilities –13 5 Cash flow from movements in working capital –5,851 11,914 Cash flow from operating activities –5,483 12,360 Investments in shares and participations — –9,217 Dividend received from subsidiary 3 3,200 4,000 Cash flow from investing activities 3,200 –5,217 Cash flow from operating and investing activities –2,283 7,143 FINANCING ACTIVITIES Proceeds from bond issuance 10 5,457 5,835 Repayment of bond 10 –5,732 –6,933 Repayment to credit institutions 10 –199 — Change in non-current receivables Group companies 3 473 –5,835 Group contributions received 2,525 — Acquisition of treasury shares –219 –190 Other –17 –19 Cash flow from financing activities 2,288 –7,142 Cash flow for the year 5 1 Cash and cash equivalents at beginning of year 1 — Cash and cash equivalents at end of year 6 1 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 120 VOLVO CAR GROUP  / FINANCIALS / PARENT COMPANY FINANCIAL STATEMENTS ===== SIDA 121 ===== NOTE 1 ACCOUNTING POLICIES Basis of preparation The Parent company has prepared its financial statements in accordance with the Swedish Annual Accounts Act (1995:1554) and RFR 2, Accounting for Legal entities. According to RFR 2, the Parent company shall apply all the International Financial Reporting Stand - ards endorsed by the EU as far as this is possible within the frame - work of the Swedish Annual Accounts Act. Changes in RFR 2 appli - cable to the fiscal year beginning 1 January 2025, have had no material impact on the financial statements of the Parent company. All specific accounting policies considered material to Volvo Car Group are described in conjunction with each presented note in the consolidated financial statements. The main deviations between the accounting policies applied by the Volvo Car Group and the Parent company are described below. Shares and participations in Group companies Shares and participations in Group companies are recognised at cost in the Parent company’s balance sheet and test for impairment is per- formed annually or whenever there is an indication to do so. Dividends are recognised in the income statement. Profit and loss from all shares and participations are reported within income before tax. Transaction costs directly attributable to acquisitions of shares and participations in Group companies are accounted for as an increase in the carrying amount. Group contributions made to subsidiaries are reported as an increase of investments in these subsidiaries. A review is at the same time made to conclude whether or not there is an impairment risk with regards to the same shares of the subsidiaries having received the group contribution. Tax effect of these group contribu - tions are recognised in the income statement. Group contributions made to parent company are recognised in equity, along with the tax effect. Received group contributions from subsidiaries are recog - nised as financial income. Tax effect on received group contribu - tions are recognised in the income statement. Received group Notes to The Parent Company Financial Statements All amounts are in SEKm unless otherwise stated. Amounts in brackets refer to the preceding year. contributions from parent company are recorded in equity, along with the tax effect. Made shareholders’ contributions are recognised in shares in subsidiaries and as such they are subject to impairment testing. Income taxes Deferred tax liability on untaxed reserves is included in untaxed reserves in the parent company. Financial guarantees The company applies the exemption according to RFR 2 in the application of IFRS 9, which relates to accounting and valuation of financial guarantee agreements for the benefit of subsidiaries and associated companies. The parent company reports the financial guarantee agreements as contingent liabilities. Equity In accordance with the Swedish Annual Accounts Act, equity is split between restricted and non-restricted equity. NOTE 2 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Preparation of the financial statements in accordance with the Swedish Annual Accounts Act (1995:1554) and RFR 2 requires the Company’s Executive management and Board of Directors to make estimates and judgements as well as to make assumptions that affect application of the accounting policies and the reported assets, liabilities, income and expenses. Critical accounting esti - mates and judgements applied by the Volvo Car Group are described in conjunction with applicable note in the consolidated financial statements. None of these critical accounting estimates are applicable to the parent company. Shares and participations in Group companies recognised at cost in the Parent company are being tested for impairment annually or if an indication of impair - ment exists. NOTE 3 RELATED PARTY TRANSACTIONS During the year, the parent company entered into the following transactions with related parties: Sales of goods, services and other Purchase of goods, services and other 2025 2024 2025 2024 Companies within the Volvo Car Group, % 100 100 1 1 2025 2024 Interest income from subsidiaries 1,418 1,583 Interest income from parent company 2 3 Receivables Payables 31 Dec 2025 31 Dec 2024 31 Dec 2025 31 Dec 2024 Companies within the Volvo Car Group 46,205 44,465 4,267 4 whereof short-term 22,062 22,780 4,267 4 Companies within the Geely Sweden Holdings Group 76 73 — — whereof short-term — — — — Business transactions between the parent company and related parties all arise in the normal course of business and are conducted on the basis of arm’s length principles. Volvo Car AB (publ.) has received group contribution from its subsidiary, Volvo Car Corpora - tion of SEK — (2,525) m. Volvo Car AB (publ.) has given group contribution of SEK 4,262 (—) m to its subsidiary, Volvo Car Corpo - ration. Further, Volvo Car AB (publ.) has received dividend of SEK 3,200 (4,000) m from its subsidiary, Volvo Car Corporation. Volvo Car AB (publ.) does not engage in any transactions with Board members or senior executives except ordinary remunerations OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 121 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS ===== SIDA 122 ===== for services. For further information regarding remunerations, see Note 8 - Employees and remuneration and Note 9 – Share-based remuneration, in the consolidated financial statements. NOTE 4 AUDIT FEES TSEK 2025 2024 Deloitte Audit fees –129 –158 Audit-related fees –465 –322 Total –594 –480 Audit fees involve audit of the Annual Report, financial accounts and the administration by the Board of Directors and the Managing Directors. The audit also includes advice and assistance as a result of the observations made in connection with the audit. Audit-related fees refer to other assignments to ensure quality in the financial statements including consultations on reporting requirements and internal control. NOTE 5 REMUNERATION TO THE BOARD OF DIRECTORS Information on renumeration to Board members by gender is shown in Note 8 – Employees and remuneration and Note 9 – Share-based remuneration, in the consolidated statements. NOTE 6 OTHER FINANCIAL INCOME AND EXPENSES 2025 2024 Expenses for credit facilities –21 –19 Bond fees –7 –6 Other financial income — 1 Other financial expenses — –1 Total –28 –25 NOTE 7 TAXES Income tax recognised in income statement 2025 2024 Deferred taxes 806 –583 Total 806 –583 Reconciliation between current tax rate in Sweden and effective tax rate 2025 2024 Income before tax for the year 3,549 7,035 Tax according to applicable Swedish tax rate, 20.6 (20.6)% –731 –1,449 Received dividends, non-taxable 659 824 Operating income/costs, non-taxable — 37 Tax effect of Group contributions given, made on shares in subsidiaries 878 — Tax effect of deductible costs reported over equity — 5 Total 806 –583 The corporate statutory income tax rate in Sweden was 20.6 (20.6) per cent. The effective tax rate on profit before taxes was –22.71 (8.29) per cent. Total deferred tax assets of SEK 3,146 ( 2,340) m relates to tax loss-carry forward SEK 15,271 (11,358) m, with an indefinite period of utilisation. Deferred tax assets are only accounted for to the extent there are taxable temporary differences or other factors that convincingly indicate there will be sufficient future taxable profit. NOTE 8 PARTICIPATION IN SUBSIDIARIES 31 Dec 2025 31 Dec 2024 At beginning of the year/acquired acquisition value 18,103 18,022 Given group contribution 4,262 — Share-based payments 68 81 Total 22,433 18,103 Volvo Car AB's (publ.) investments in subsidiaries: Corp. ID no. Registered office No. of shares % interest held Book value 31 Dec 2025 Book value 31 Dec 2024 Volvo Personvagnar AB 1)2)3) 556074-3089 Gothenburg / Sweden 724,889 100 22,433 18,103 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 122 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS ===== SIDA 123 ===== Legal entity Corp. ID no. Registered office % interest held Sweden Automotive Components Floby AB 556981-8874 Falköping / Sweden 100 Fastighetsbolag Sörred 8:9 AB 559176-3890 Gothenburg / Sweden 100 Fastighetsbolag Sörred 8:11 AB 556994-2351 Gothenburg / Sweden 100 Fastighetsbolag Sörred 8:17 AB 559394-9851 Gothenburg / Sweden 100 HaleyTek AB 559307-9485 Gothenburg / Sweden 100 NOVO Energy AB 559344-2600 Gothenburg / Sweden 100 NVC Energy VII AB 559344-2410 Gothenburg / Sweden 100 VCLC Services AB 559470-7639 Gothenburg / Sweden 70 Volvo Bil i Göteborg AB 556056-6266 Gothenburg / Sweden 100 Volvo Car Australia Holding AB 556152-2680 Gothenburg / Sweden 100 Volvo Car Försäkrings AB 556877-5778 Gothenburg / Sweden 100 Volvo Car Insurance Distribution AB 559140-6417 Gothenburg / Sweden 100 Volvo Car Investment and Borrowing AB 556130-4246 Gothenburg / Sweden 100 Volvo Car NSC Holding AB 556754-8283 Gothenburg / Sweden 100 Volvo Car Real Estate and Assets 1 AB 55 6 20 5-7 2 9 8Gothenburg / Sweden 100 Volvo Car Real Estate and Assets 3 AB 559176-3908 Gothenburg / Sweden 100 Volvo Car Real Estate and Assets 7:24 AB 559064-3457 Gothenburg / Sweden 100 Volvo Car Services 6 AB 559140-6433 Gothenburg / Sweden 100 Volvo Car Services 9 Holding AB 559228-9366 Gothenburg / Sweden 100 Volvo Car Services 14 AB 559470-7647 Gothenburg / Sweden 100 Volvo Car Services Sweden AB 55 6 6 01-78 4 3Gothenburg / Sweden 100 Volvo Car Sverige AB 556034-3484 Gothenburg / Sweden 100 Volvo Car Technology Fund AB 556877-5760 Gothenburg / Sweden 100 Volvo Personvagnar Norden AB 556413-4848 Gothenburg / Sweden 100 Zenseact AB 559228-9358 Gothenburg / Sweden 100 Europe Volvo Car Austria GmbH Austria 100 Volvo Car Czech Republic s.r.o. Czech Republic 100 Volvo Car Denmark A/S Denmark 100 Volvo Car Finland Oy Ab Finland 100 Volvo Car France SAS France 100 Volvo Car Germany GmbH Germany 100 Volvo Car Hellas Anonymous 4) Greece 100 Volvo Car Hungary Trading and Service Ltd Hungary 100 Volvo Car Gallery Ltd Hungary 100 Volvo Car Ireland Ltd Ireland 100 Volvo Car Italia S.p.A. Italy 100 Legal entity Registered office % interest held Volvo Car Nederland B.V. The Netherlands 100 Volvo Car Nederland Financial Services B.V. The Netherlands 100 SNEBE Holding B.V. The Netherlands 100 SNITA Holding B.V. The Netherlands 100 SWENE Holding B.V. The Netherlands 100 Volvo Car Norway AS Norway 100 Volvo Car Poland Sp. z.o.o. Poland 100 Volvo Car Portugal S.A. Portugal 100 Volvo Car Espana S.L. Spain 100 Volvo Car Slovakia s.r.o Slovakia 100 Volvo Car Switzerland AG Switzerland 100 Volvo Car UK Ltd United Kingdom 100 North and South America Volvo Car Brasil Importacao e Comercio de Veiculos Ltda Brazil 100 Volvo Car do Brasil Automoveis Ltda Brazil 100 Volvo Car Canada Ltd Canada 100 Volvo Car Mexico S.A. de C.V. Mexico 100 Volvo Car Financial Services U.S., LLC USA 100 Volvo Car North America, LLC USA 100 Africa and Asia Volvo Cars (China) Investment Co., Ltd. China 100 Volvo Cars Technology (Shanghai) Co., Ltd. China 100 Volvo Auto India Pvt. Ltd India 100 Volvo Car Japan Ltd Japan 100 Volvo Car Korea Co., Ltd Korea 100 Volvo Car Manufacturing Malaysia Sdn Bhd Malaysia 100 Volvo Car Singapore Pte. Ltd Singapore 100 Volvo Car South Africa Pty Ltd South Africa 100 Volvo Car Taiwan Ltd Taiwan 100 Volvo Car Turkey Otomobil Ltd Sirketi Türkiye 100 Volvo Car RDC Middle East FZE United Arab Emirates 100 1) Referred to as Volvo Car Corporation. 2) PSINV AB, effective as of 14 May 2025, and Volvo Car Mobility Sweden AB, effective as of 5 November 2025, were merged into Volvo Car Corporation. CLPE AB is liquidated at 31 December 2025. 3) From 2 October 2025, Volvo Car Services 15 AB is a indirect wholly-owned subsidary. 4) Legal name in full: Volvo Car Hellas Anonymous and Industrial company of car and spare parts imports and trade. The share of voting power corresponds to holdings in per cent as seen in the table above. The countries where the subsidiaries are registered are also where their main operations are carried out. Details of Volvo Car Corporation’s directly owned subsidiaries at the end of the reporting period are presented in the following table. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 123 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS ===== SIDA 124 ===== Significant restrictions For some subsidiaries there are restrictions on the Volvo Car Group’s ability to access or use cash from these subsidiaries, for more information on cash that is not available or with other limita - tions, see Note 20 – Marketable securities and cash and cash equivalents in the consolidated financial statements. Details of non-wholly-owned subsidiaries that have non- controlling interests On 25 June 2015, Volvo Car Group, through one of its wholly -owned subsidiaries, Volvo Cars (China) Investment Co., Ltd, acquired an additional 20 per cent in Volvo Cars’ Chinese joint venture compa - nies. In the consolidated financial statements, these joint venture companies are classified as subsidiaries and fully consolidated with a non-controlling interest of 50 per cent since Volvo Car Group has the decision-making power over the operations. Further, Daqing Volvo Car Manufacturing Co., Ltd holds 100 per cent of the shares in Volvo Car (Asia Pacific) Investment Holding Co., Ltd which holds 100 per cent of Zhongjia Automobile Manufacturing (Chengdu) Co., Ltd and Shanghai Zhaowo Auto Sales Co., Ltd. On 1 August 2024, Volvo Car Corporation acquired the remaining 40 per cent of the shares in HaleyTek AB from ECARX Technology Co., Ltd, a related company with the same ultimate shareholder as Volvo Car Group, but outside the Geely sphere of companies. As a consequence, the non-controlling interest ceased. Registered office % interest held Profit allocated to non-controlling interests Accumulated non-controlling interests Legal entity: 31 Dec 2025 31 Dec 2024 31 Dec 2025 31 Dec 2024 31 Dec 2025 31 Dec 2024 Daqing Volvo Car Manufacturing Co., Ltd. 1) China 50 50 –2,980 652 1,186 4,696 Shanghai Volvo Car Research and Development Co., Ltd. 1) China 50 50 2 2 110 124 HaleyTek AB Sweden — — — –36 — — NOVO Energy AB Sweden — 50 –164 –85 — –85 VCLC Services AB Sweden 30 30 — — 3 3 Total non-controlling interests –3,142 533 1,299 4,738 1) 50 per cent held by Zhejiang Geely Holding Group Co., Ltd, which is the ultimate parent company of the Volvo Car Group. On 1 October 2024, Lynk & Co International AB, a related party company within the Geely sphere of companies, acquired 30 per cent of the shareholding in the wholly-owned subsidiary VCLC Services AB. VCLC Services AB is still classified as a subsidiary and fully consolidated with a non-controlling interest of 30 per cent since Volvo Car Group has the power of control. On 4 July 2025, Volvo Car Corporation acquired the remaining 50 per cent of the shares in Novo Energy AB. As a consequence, the non-controlling interest ceased. The transaction was succeeding the initiated process from 30 October 2024, when Volvo Cars initi - ated a process to acquire Northvolt AB’s shares in the joint venture company NOVO Energy AB by executing its redemption right. NOVO Energy AB and its wholly-owned subsidiaries were from 30 October 2024 reclassified from joint venture to subsidiaries and fully consolidated, with a non-controlling interest of 50 per cent. For more information, see Note 27 – Business combinations and divestments, in the consolidated financial statements. The table below shows details of non-wholly-owned subsidiaries of the Group that have non-controlling interests. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 124 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS ===== SIDA 125 ===== NOTE 9 EQUITY Volvo Car AB (publ.) is listed on the Nasdaq Stockholm Stock Exchange (ticker symbol: VOLCAR). On 26 March 2024, the Annual General Meeting resolved, in accordance with the Board of Directors proposal, to distribute a portion of Volvo Cars’ shareholding in Polestar Automotive Holding UK PLC to Volvo Cars’ shareholders by way of a share split (2:1) of the class B shares. A reduction of the share capital through redemp - tion of shares, and an increase of the share capital through a bonus issue without issuance of new shares. The distribution of shares, reflected at fair value at 8 May, reduced the equity by SEK 9,306 m including transaction costs. For further information, see Note 12 – Investments in joint ventures and associates and Note 21 – Equity, in the consolidated financial statements. Equity-settled share-based payments in connection with employee incentive plans are recognised in equity and settled using treasury shares. For further information, see Note 9 – Share-based remuneration and Note 21 – Equity, in the consolidated financial statements. NOTE 10 FINANCIAL INSTRUMENTS Bonds In January 2025, a EUR 500 m bond, issued in 2017, was repaid by Volvo Car AB (publ.). In June 2025, a green bond of EUR 500m was raised through issuance with a tenor of four years. In April 2024, a EUR 600 m bond, issued in April 2019, was repaid. In May 2024, a EUR 500 m green bond was issued. Liabilities to credit institutions In September 2025, a new green bilateral eight-year loan agreement of EUR 150 m was signed. The loan facility remains undrawn as of the end of 2025. In November 2025, the first extension option on the existing sustainability-linked Revolving Credit Facilities was exercised, extending maturities by one year. The updated maturities for the Revolving Credit Facilities of EUR 500 m and EUR 1 500 m are in 2028 and 2030, respectively. In December 2024, Revolving Credit Facilities of EUR 1,500 m with a five-year tenor and EUR 500 m with a three-year tenor were signed. Both facilities are sustainability-linked and have two one- year extension options. The new facilities have refinanced the Revolving Credit Facility of EUR 1,300 m with maturity in 2026. No fair value hedge is applied in Volvo Car AB (publ.). For more information see Note 19 – Financial risks and financial instruments in the consolidated financial statements. NOTE 11 CONTINGENT LIABILITIES Volvo Car AB (publ.) has a parental guarantee for Volvo Car Corpo - ration for the purpose of securing the various obligations and liabili - ties under the facility agreement with EIB. The guarantee is in total of EUR 345 (345) m and USD 438 (—) m. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 125 VOLVO CAR GROUP  / FINANCIALS / NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS ===== SIDA 126 ===== Proposed distribution of non-restricted equity The parent company The following funds are at the disposal of Annual General Meeting (AGM): Share premium reserve SEK 31,653,517,859 Retained earnings brought forward SEK 5,083,584,404 Net income for the year SEK 4,355,103,303 At the disposal of the AGM SEK 41,092,205,566 The Board proposes the following allocation of funds: Carried forward SEK 41,092,205,566 The Board of Directors and the CEO hereby certify that the consolidated financial statements have been prepared in accordance with Interna - tional Financial Reporting Standards, IFRS, as adopted by the EU and provide a true and fair view of the Group’s financial position and earnings. The Annual Report has been prepared in accordance with generally accepted accounting principles and provides a fair and true view of the Parent company’s financial position and earnings. The Board of Directors’ report for the Group and the Parent Company provides a true and fair overview of the development of the operations, financial position and earnings of the Group and Parent company and describes material risks and uncer - tainty factors facing the Parent company and the companies included in the Group. The Board of Directors and the CEO certify that the Sustain - ability Statement has been prepared in accordance with European Sustainability Reporting Standards (ESRS) as adopted by the EU and the EU Taxonomy Regulation. The annual report is dated on 4 March 2026 Gothenburg, 4 March 2026 Eric Li (Li Shufu) Chairperson of the Board Håkan Samuelsson Daniel Li (Li Donghui) Jonas Samuelson CEO Board member Board member Ruby Lu (Rong Lu) Diarmuid O’Connell Lila Tretikov Board member Board member Board member Anna Mossberg Pieter Nota Caroline Grégoire-Sainte-Marie Board member Board member Board member Adrian Avdullahu Jörgen Olsson Zara Biske Employee representative Employee representative Employee representative Our audit report on the Annual report and consolidated accounts, and our limited assurance report on the Sustainability statement have been submitted on 4 March 2026 Deloitte AB Fredrik Jonsson Authorized Public Accountant OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 126 VOLVO CAR GROUP  / FINANCIALS / PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY ===== SIDA 127 ===== Auditor’s Report This auditor’s report is a translation of the Swedish language original. In the events of any differences between this translation and the Swedish original the latter shall prevail. To the general meeting of the shareholders of Volvo Car AB (publ.) corporate identity number 556810-8988 Report on the annual accounts and consolidated accounts Opinions We have audited the annual accounts and consolidated accounts of Volvo Car AB (publ) for the financial year 2025-01-01–2025-12-31. The annual accounts and consolidated accounts of the company are included on pages 29–35, 61–114, 119–126 in this document. In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of 31 December 2025 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 December 2025 and their financial performance and cash flow for the year then ended in accordance with IFRS Accounting Standards, as adopted by the EU, and the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts and consoli - dated accounts. We therefore recommend that the general meeting of sharehold - ers adopts the income statement and balance sheet for the parent company and the group. Our opinions in this report on the annual accounts and consoli - dated accounts are consistent with the content of the additional report that has been submitted to the parent company’s audit com- mittee in accordance with the Audit Regulation (537/2014) Article 11. Basis for Opinions We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor’s Responsibilities section. We are inde - pendent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. This includes that, based on the best of our knowl - edge and belief, no prohibited services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided to the audited company or, where applicable, its parent company or its controlled companies within the EU. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions. Key Audit Matters Key audit matters of the audit are those matters that, in our profes - sional judgment, were of most significance in our audit of the annual accounts and consolidated accounts of the current period. These matters were addressed in the context of our audit of, and in form - ing our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide a separate opinion on these matters. Accounting for contractual warranties and related campaign decisions The Company grants product warranties to their end customers, which are contractual warranties covering certain defects in mate - rial and workmanship of Volvo Car products sold. Estimated war - ranty costs include contractual warranty and other costs not cov - ered by standard contractual commitments. All warranty provisions are recognized at the point of time when the sale of the vehicles or spare parts are made, subsequently adjusted for trends in claims data. Further, provision of warranty is adjusted as campaign deci - sions for specific quality problems are made. The accounting princi - ples for warranty and management’s significant judgments applied in relation thereto are further described in Note 23 “Current and Other Non-Current Provisions” to the annual report. The principal considerations for our determination that provision for contractual warranties and related campaign decisions is a key audit matter are (i) the significant judgment by management in the estimation of the provision and (ii) high degree of auditor judge - ment, subjectivity and effort in performing procedures to evaluate management’s assumptions related to the nature, frequency and cost of future claims. Our audit procedures included, but were not limited to: • Evaluating the process used, and assessing the assumptions applied, in determining the estimated provision for contractual warranty and adjustments for campaign decisions. • Assessing the reasonableness of the methodology used in deter - mination of provision for contractual warranty and adjustments for campaign decisions, including accounting principles applied. • Performing substantive analytical procedures on provision for con - tractual warranty based on relevant data and expected changes. • On a sample basis, assessing and challenging the reasonableness of management´s significant assumptions in relation to release in provisions, expected number of products returned and the valua - tion of estimated cost for campaign decisions. • Reading minutes and making inquiries with management to evalu - ate that decisions on campaigns, which have been taken during the year and up to the signing of the annual report, have been reflected in the correct period. • In collaboration with our IT-specialists, audited relevant general IT-controls for IT-systems used in the financial reporting of con - tractual warranty provisions. Impairment of long-lived assets for the EX90 and ES90 platform The Group reports significant values of tangible and intangible fixed assets in the cash-generating unit (CGU) for the platform of the vehicle models EX90 and ES90. During the year, indications of impairment were identified, and the company has prepared an impairment test. The company’s assessment of the recoverable amount is based on its value in use, which is derived from a discounted cash flow model using inter- nal business plans. The assessment requires management to make sig- nificant estimates and assumptions regarding, for example, forecasts for sales volumes and sales margins, including emission credits and discount rates. During 2025, Volvo Cars reported an impairment charge of SEK 11.4 billion attributable to the cash-generating unit (CGU), EX90 and ES90 platform. The impairment was primarily driven by delays in the launch of the EX90 and ES90 platform, which led to increased development costs, unfavorable macroeconomic conditions, the imposition of increased tariffs which significantly affected production costs and profitability, and a slower transition from internal combustion engine vehicles (ICE) to battery electric vehicles (BEV) than previously expected. The accounting principles for impairment of long-lived OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 127 VOLVO CAR GROUP  / FINANCIALS / AUDITOR’S REPORT ===== SIDA 128 ===== assets and management’s significant judgments in connection with these are described in more detail in Note 15 “Intangible Assets” and Note 16 “Tangible Assets” in the annual report. The principal considerations for identifying the impairment of the EX90 and ES90 platform (CGU) as a key audit matter include (i) man- agement’s significant judgments made in selecting key assumptions underpinning the discounted cash flow model (DCF), including vol- ume forecasts, sales margins including emission credits and discount rates, (ii) the complexity of the model and its sensitivity to changes in these assumptions, and (iii) the material financial impact that the impairment has on the Group’s consolidated financial statements. Our audit procedures included, but were not limited to: • With the assistance of our valuation specialists, evaluate the rea - sonableness of the method applied in preparing the impairment test to determine the estimated recoverable amount. • Evaluate the process and management’s forecasts regarding future sales growth, operating profit, working capital, and invest- ment needs by comparing actual results with management’s his- torical forecasts and consistency with the board-approved busi- ness plan. • With the assistance of our valuation specialists, evaluate the dis- count rates selected by management, including testing of underly- ing source data and the mathematical correctness of the calcula- tions, and develop a range of independent estimates for comparison. • With the assistance of our valuation specialists, evaluate the com- pany’s sensitivity analyses and compare these with our own sensi- tivity analyses to confirm the disclosures regarding assumptions that are most sensitive to reasonable changes, that could result in the carrying amount exceeding the recoverable amount of the cash-generating unit. • With the assistance of our accounting specialists, assess that the required disclosures have been provided in the annual report. Other information than the annual accounts and consolidated accounts This document also contains other information than the annual accounts and consolidated accounts and is found on pages 1–28, 36–41, 115–118, 130–213, 216–218, 220–227. The other information also includes the Renumeration Report which we received before the signing date of this Auditor’s report. The Board of Directors and the Managing Director are responsible for this other information. Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information In connection with our audit of the annual accounts and consoli - dated accounts, our responsibility is to read the information identi - fied above and consider whether the information is materially incon - sistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated. If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other infor - mation, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Board of Directors and the Managing Director The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consolidated accounts, in accordance with IFRS Accounting Standards as adopted by the EU. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is neces - sary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error. In preparing the annual accounts and consolidated accounts, The Board of Directors and the Managing Director are responsible for the assessment of the company’s and the group’s ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the Managing Director intends to liquidate the company, to cease operations, or has no realistic alternative but to do so. The Audit Committee shall, without prejudice to the Board of Director’s responsibilities and tasks in general, among other things oversee the company’s financial reporting process. Auditor’s responsibility Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always detect a material mis - statement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts and consolidated accounts. A further description of our responsibilities for the audit of the annual accounts and consolidated accounts is located at the Swed - ish Inspectorate of Auditors website: www.revisorsinspektionen.se/ revisornsansvar. This description forms part of the auditor´s report. Report on other legal and regulatory requirements Opinions In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors and the Managing Director of Volvo Car AB (publ) for the financial year 2025-01-01 - 2025-12-31 and the proposed appropri- ations of the company’s profit or loss. We recommend to the general meeting of shareholders that the profit to be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year. Basis for Opinions We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor’s Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accord - ance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions. Responsibilities of the Board of Directors and the Managing Director The Board of Directors is responsible for the proposal for appropria - tions of the company’s profit or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requirements which the company’s and the group’s type of operations, size and risks place on the size of the parent company’s and the group’s equity, consolidation requirements, liquidity and position in general. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 128 VOLVO CAR GROUP  / FINANCIALS / AUDITOR’S REPORT ===== SIDA 129 ===== The Board of Directors is responsible for the company’s organization and the administration of the company’s affairs. This includes among other things continuous assessment of the company’s and the group’s financial situation and ensuring that the company’s organiza - tion is designed so that the accounting, management of assets and the company’s financial affairs otherwise are controlled in a reassur - ing manner. The Managing Director shall manage the ongoing admin- istration according to the Board of Directors’ guidelines and instruc - tions and among other matters take measures that are necessary to fulfill the company’s accounting in accordance with law and handle the management of assets in a reassuring manner. Auditor’s responsibility Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors or the Managing Director in any material respect: • has undertaken any action or been guilty of any omission which can give rise to liability to the company, or • in any other way has acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. Our objective concerning the audit of the proposed appropriations of the company’s profit or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the pro - posal is in accordance with the Companies Act. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company’s profit or loss are not in accordance with the Companies Act. A further description of our responsibilities for the audit of the management’s administration is located at the Swedish Inspector - ate of Auditors website: www.revisorsinspektionen.se/rn/showdoc - ument/documents/rev_dok/revisors_ansvar.pdf. This description forms part of the auditor´s report. The auditor’s examination of the Esef report Opinion In addition to our audit of the annual accounts and consolidated accounts, we have also examined that the Board of Directors and the Managing Director have prepared the annual accounts and consolidated accounts in a format that enables uniform electronic reporting (the Esef report) pursuant to Chapter 16, Section 4 a of the Swedish Securities Market Act (2007:528) for Volvo Car AB (publ) for the financial year 2025-01-01 - 2025-12-31. Our examination and our opinion relate only to the statutory requirements. In our opinion, the Esef report has been prepared in a format that, in all material respects, enables uniform electronic reporting. Basis for opinion We have performed the examination in accordance with FAR’s rec - ommendation RevR 18 Examination of the Esef report. Our responsi - bility under this recommendation is described in more detail in the Auditors’ responsibility section. We are independent of Volvo Car AB (publ) in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of the Board of Directors and the Managing Director The Board of Directors and the Managing Director are responsible for the preparation of the Esef report in accordance with the Chap - ter 16, Section 4 a of the Swedish Securities Market Act (2007:528), and for such internal control that the Board of Directors and the Managing Director determine is necessary to prepare the Esef report without material misstatements, whether due to fraud or error. Auditor’s responsibility Our responsibility is to obtain reasonable assurance whether the Esef report is in all material respects prepared in a format that meets the requirements of Chapter 16, Section 4(a) of the Swedish Securities Market Act (2007:528), based on the procedures per - formed. RevR 18 requires us to plan and execute procedures to achieve reasonable assurance that the Esef report is prepared in a format that meets these requirements. Reasonable assurance is a high level of assurance, but it is not a guarantee that an engagement carried out according to RevR 18 and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Esef report. The firm applies International Standard on Quality Management 1, which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. The examination involves obtaining evidence, through various procedures, that the Esef report has been prepared in a format that enables uniform electronic reporting of the annual accounts and consolidated accounts. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement in the report, whether due to fraud or error. In carry - ing out this risk assessment, and in order to design audit procedures that are appropriate in the circumstances, the auditor considers those elements of internal control that are relevant to the prepara - tion of the Esef report by the Board of Directors and the Managing Director, but not for the purpose of expressing an opinion on the effectiveness of those internal controls. The examination also includes an evaluation of the appropriateness and reasonableness of assumptions made by the Board of Directors and the Managing Director. The procedures mainly include a validation that the Esef report has been prepared in a valid XHMTL format and a reconciliation of the Esef report with the audited annual accounts and consolidated accounts. Furthermore, the procedures also include an assessment of whether the consolidated statement of financial performance, financial position, changes in equity, cash flow and disclosures in the Esef report have been marked with iXBRL in accordance with what follows from the Esef regulation. Deloitte AB, was appointed auditor of Volvo Car AB (publ) by the general meeting of the shareholders on the 2025-04-03 and has been the company’s auditor since 2010-06-22. Gothenburg 4 March, 2026 Deloitte AB Signature on Swedish original Fredrik Jonsson Authorized public accountant OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ALTERNATIVE PERFORMANCE MEASURES PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS PROPOSED DISTRIBUTION OF NON-RESTRICTED EQUITY AUDITOR’S REPORT SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 129 VOLVO CAR GROUP  / FINANCIALS / AUDITOR’S REPORT ===== SIDA 130 ===== Sustainability OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY 130 ===== SIDA 131 ===== Sustainability table of contents GENERAL INFORMATION 133 About our Sustainability Statement 134 Strategy, business model and value chain 138 Stakeholder engagement 138 Ratings 140 Sustainability governance 145 Materiality assessment ENVIRONMENTAL INFORMATION 149 EU Taxonomy Report 153 Climate change 164 Pollution 167 Water 170 Biodiversity and ecosystems 173 Resource use and circular economy SOCIAL INFORMATION 180 Own workforce 189 Workers in the value chain 195 Consumers and end-users GOVERNANCE INFORMATION 200 Business conduct OTHER INFORMATION 207 Restatements 209 Index of ESRS Disclosure Requirements 211 List of datapoints that derive from other EU legislation 213 Statement on due diligence 214 Auditor’s limited assurance report on Volvo Cars’ statutory Sustainability Statement 216 UN Sustainable Development Goals 217 Green Financing Report 219 Auditor’s limited assurance report on Volvo Cars’ Green Financing Report 132–147 148–178 199–205179–198 206–219 The Sustainability Statement, prepared in accordance with ESRS, is included in page 130–213 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 131 VOLVO CAR GROUP  / SUSTAINABILITY ===== SIDA 132 ===== General information About our Sustainability Statement PAGE 133 Strategy, business model and value chain PAGE 134–137 Stakeholder engagement PAGE 138 Ratings PAGE 138 Sustainability governance PAGE 140–144 Materiality assessment PAGE 145–147 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 132 VOLVO CAR GROUP  / SUSTAINABILITY ===== SIDA 133 ===== About our Sustainability Statement General information and accounting principles This Sustainability Statement covers Volvo Cars’ operations and performance for the financial year 2025. It provides an overview of our sustainability strategy, governance, risk management and stake - holder engagement. In addition, it includes information on material sustainability matters for our business, the monitoring of these matter as well as the policies, actions and ambitions for each sustainability matter identified as material in our double materiality assessment. The Statement is prepared in accordance with the Swedish Annual Accounts Act Chapter 6, European Sustainability Reporting Standards (ESRS) and the EU Taxonomy Regulation. In preparing the Sustainability Statement, the significance and relevance of sustain - ability-related information are assessed to ensure that the disclo - sures provided are useful and decision -relevant for the primary users of the Statement. These assessments are made on a case-by-case basis for each datapoint and sustainability matter, ensuring that the final set of disclosures reflects information that is material for the undertaking and relevant for users. In addition to the disclosures required by the ESRS, the Statement includes entity-specific disclosures that provide supplementary information relevant to the identified material sustainability mat - ters. These disclosures are referenced in indexes, found on page 209, together with the applicable ESRS Disclosure Requirements, the phase-in provision applied in preparing this Statement, and data points incorporated pursuant to other relevant EU legislation. Throughout this Statement, we use the term ambition instead of target, which is the terminology prescribed by ESRS. The term ambition carries the same meaning as target as defined in ESRS. Scope of the report The report includes Volvo Car AB (publ.) and its subsidiaries. The scope for the report reflects the scope of the financial report. More information on the basis of preparation and consolidation can be found in Note 1 in the notes to the Consolidated Financial Statements. The full value chain is considered when evaluating impact, risk and opportunity in the double materiality assessment, as well as how these are managed. The quantitative metrics disclosed in this Statement refer solely to the operations of Volvo Cars, unless otherwise specified. Sources of estimation and outcome uncertainties Estimates and assumptions are required in some quantitative infor - mation, where primary data is unavailable, including some Scope 3 greenhouse gas categories and the share of recycled material in new car models. Environmental information for our operations is based on consoli - dated data from our manufacturing and non-manufacturing opera - tions, some of which have a lag in data prepared. Due to this, estima - tions are prepared for the missing periods up to 31 December, using actual data for comparable periods. Estimations are subject to relevant impact factors, such as production volume variation. Further information on reporting methodology and how judge - ments, estimates and uncertainties are applied, can be found within each section of this Sustainability Statement. Sustainability is a core component, integrated into our business and investment decision-making processes. The monetary resources allocated for the implementation of action plans are, however, not allocated by individual components. Thus, we are unable to separately disclose the sustainability-related resources, including CapEx or OpEx, for these action plans. Changes in preparing the statement and restatements During the year, we have enhanced our processes for preparing quantitative information included in the Statement. As part of these improvements, we have restated certain historical figures to ensure consistency and comparability across reporting periods. More infor - mation can be found on page 207. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 133 VOLVO CAR GROUP  / SUSTAINABILITY / GENERAL INFORMATION ===== SIDA 134 ===== CLIMATE ACTION We aim to reach net zero greenhouse gas emissions by 2040 Our ambition to reach net zero greenhouse gas emissions by 2040 is consistent with the 1.5°C pathway and the goals of the Paris Agreement. FOCUS AREAS • Transform to pure electrification • Minimise emissions from materials • Minimise operational emissions 2025 AMBITIONS • Reduce CO 2 emissions by 30–35 per cent per car (from a 2018 baseline): • 50–60 per cent electrified car sales • 50 per cent reduction of tailpipe emissions per car • 25 per cent reduction of emissions from materials per car • 25 per cent reduction of operational emissions per car 2030 AMBITIONS • Reduce CO 2 emissions by 65–75 per cent per car (from a 2018 baseline): • 90–100 per cent electrified car sales, with a complete line-up of fully electric cars available • 85–100 per cent reduction of tailpipe emissions per car • 30 per cent reduction of emissions from materials per car • 30 per cent reduction in operational emissions per car • Science Based Targets initiative (from a 2019 baseline) • 60 per cent reduction of Scope 1 and 2 • 52 per cent reduction of Scope 3 (Use of sold products) CIRCULAR ECONOMY We aim towards becoming a circular business by 2040 By minimising primary material use, eliminating waste and pollution and growing circular business, we aim to significantly reduce our environmental impact. FOCUS AREAS • Minimise primary resource use • Eliminate waste and pollution • Grow circular business 2025 AMBITIONS • 25 per cent recycled and bio-based material in new car models • Generate one billion SEK from circular economy initiatives (from a 2018 baseline) 2030 AMBITIONS • 30 per cent recycled and bio-based material average across the fleet and 35 per cent for new car models • >99 per cent recirculation rate • 50 per cent reduction in water withdrawal per manufactured car in own operations (from a 2018 baseline) LONG-TERM BIODIVERSITY AMBITION • Be net positive across our value chain and contribute to a nature positive future RESPONSIBLE BUSINESS We aim to protect and improve people’s lives in our value chain and wider society We strive to live our values and support a culture of responsible business behaviour, at both a corporate and individual level, throughout our value chain. FOCUS AREAS • Ensure employee well-being • Safeguard human rights • Contribute to a sustainable society 2025 AMBITIONS • Ensure year-over-year increase of share of women in senior leadership • Ensure a culture of inclusion and belonging by scoring +1 compared to global benchmark in engagement surveys • Injury rate (Lost Time Case Rate) for employees =<0.04 • Ensure year-over-year increase in the number of sites in value chain being assessed • 100 per cent of outstanding debt to be within the Green Financing Framework or other sustainability-linked format • EU Taxonomy alignment 50 per cent of CapEx 2030 AMBITIONS • Achieve gender equity pay by 2027 • Women in senior leadership – share of 34 per cent • Ensure a culture of inclusion and belonging by scoring +3 compared to global benchmark in engagement surveys • Injury rate (Lost Time Case Rate) for employees =<0.02 • EU Taxonomy alignment 70 per cent of CapEx Strategy, business model and value chain OUR SUSTAINABILITY STRATEGY Our purpose is to provide people freedom to move in a personal, sustainable and safe way. Sustainability is central to our business and key to our future success. We are working to reach net zero greenhouse gas emissions, embracing the circular economy and conducting business responsibly. Our actions help address global sustainability challenges and support our profitable growth. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / GENERAL INFORMATION 134 ===== SIDA 135 ===== Sustainability strategy Sustainability is an integral part of our company purpose: To provide freedom to move in a personal, sustainable and safe way. It is embedded throughout our corporate strategy and reflected in our roadmap, which focuses on three key areas: Regionalisation, Electri - fication and Profitability. Our strategy is designed to drive sustaina - ble, profitable growth by delivering human-centric customer experi - ence, fostering a high-performing and committed organisation, and offering premium electrified products for a regionalised world. Recognising and understanding the impacts, risks and opportuni - ties inherent in our business environment is fundamental to how we shape our sustainability strategy. These insights not only form the foundation for our ambitions but also serve as the basis for the way we conduct our operations. From how we incorporate a sustainable mindset into the design of our cars, to the sourcing of materials, the production and distribution of our products, and finally in the end- of-life treatment. Adopting a complete life cycle and value chain perspective of our impacts, risks and opportunities enables a holis - tic perspective and informs our corporate strategy execution. We are dedicated to ensuring that our commitment to sustainabil - ity is aligned with the objective of long-term profitability. We adopt a unified steering model that balances economic and sustainability priorities. By embedding sustainability into our decision-making processes, we build a business that is adaptive, forward-thinking and able to thrive amidst evolving environmental and market condi - tions. This continuous work strengthens the resilience of our strat - egy and business model throughout our transformation towards electrification. Integrating sustainability ambitions with electrification The future is electric and we are fully committed to executing on this vision as the market transforms. Our plug-in hybrid models serve as an important bridge to adapt to current market preferences. Electrification, as one of our corporate strategy areas, is funda - mental for our ability to reach our sustainability ambitions. Our cur - rent and future portfolio of electrified cars does not only reduce our environmental footprint compared with combustion engines; it also leads to an increased focus on transparency within in our value chain, supporting our work to address human rights risks. Further - more, the transition to electrification also unlocks more circular business models, helping decouple revenue growth from environ - mental impact, by, for example, using remanufactured and refur - bished components and batteries. Positioned for growth in electrified cars, and backed by our premium car portfolio, we aimed to achieve 50–60 per cent electrified sales in 2025 and aim to reach 90–100 per cent by 2030. In alignment with these ambitions, we have set robust climate ambitions to reduce CO2 emissions per car by 30–35 per cent this year and 65–75 per cent by 2030, compared to a 2018 baseline. Our long-term vision is clear: to transform towards full electrifica - tion and reach net zero greenhouse gas emissions by 2040. In addi - tion to our climate action strategy, this vision also aligns with our strategic pillars for circular business and responsible business. We are working towards these ambitions by taking active steps to reduce the carbon footprint, increase resource efficiency, and enabling transparency across the value chain. Customer segments and geographical focus With an almost 100-year-old presence in the automotive market, Volvo Cars represents a strong brand for our customers. In key mar - kets, such as Europe and the US, our electrification strategy has resulted in a higher market share for electrified cars, compared to cars equipped solely with combustion engines. We are facing head - winds in the electrification segment in the Chinese market, which remains a growing and important market. To address this, we are introducing a stronger focus on regionalisation, enabling increased agility to meet local customer demands. We serve customers in over one hundred countries across the world, with a global retail network of approximately 2,200 outlets. In 2025, we had approximately 710,000 retail sales and a total revenue of approximately SEK 357 billion. Regulatory landscapes and customer preferences are rapidly evolving, placing greater emphasis on our shared responsibility towards our planet and people. Our customers expect superior engi - neering and design, while considering sustainability as a prerequisite for a premium brand. To meet these expectations, we have inte - grated our sustainability ambitions directly into our product devel - opment, delivering premium electrified cars that uphold our sustain - ability commitments and address the unique mobility requirements of each market. Our regionalisation strategy allows us to address region-specific challenges and opportunities, supporting our electrified and sustainable growth. Responsible business throughout the value chain With approximately 45,000 employees, along with a broad network of suppliers and retailers, we recognise the impact we have across our value chain and the responsibility to lead sustainability initia - tives and drive positive change. Our diverse value chain includes approximately 12,000 directly contracted suppliers providing components, materials and services to our global operations, including our production sites across three continents. Our operations rely on input from our value chain, both in terms of raw material, resources and human resources. From responsible sourcing of raw materials and ensuring ethical labour practices, to minimising waste and water use, every stage of our business reflects our dedication to sustainable and responsible business conduct. We foster close collaboration with suppliers to drive sustainable solutions and improve transparency, set ambitious standards, and support continuous improvement. In summary, our holistic approach helps to ensure that our prod - ucts, customer focus and business practices align with our sustaina - bility ambitions. By integrating these principles with our electrifica - tion strategy and tailoring our efforts to each market, we aim to protect and improve people’s lives across our value chain and in wider society. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / GENERAL INFORMATION 135 ===== SIDA 136 ===== Progress on our ambitions Sustainability and business value are closely aligned. Our sustaina - bility work protects value through compliance and risk mitigation and creates value through resource efficiency, new business models and as a differentiator for consumers. In 2025, we reached a mile - stone year in our sustainability strategy and we have taken big steps towards reaching our ambitions. However, we also acknowledge that there are challenges in some areas that need extra attention moving forward. Climate action We achieved a 31 per cent CO 2 reduction per car this year, mainly driven by electrification and supported by the 37 per cent reduction of operational emissions. Significant progress has been made with low-emission and recycled materials. Work on reducing emissions from materials continues to be a strategic focus, as we increase the share of fully electric and plug-in hybrid electric vehicles. We have made significant progress to source nearly 100 per cent climate neutral energy in own operation, reaching 87 per cent, and are committed to achieving our ambition in the near future. More information on progress of our ambitions within our climate action strategy pillar can be found on page 158. Circular economy In 2025, we launched two new electrified models, the ES90 and XC70, with a combined average recycled material of 19 per cent. In January 2026, we launched our new EX60 with 27 per cent recycled material, aligning with our set ambition. This will significantly con - tribute to our 2030 recycled and bio-based material ambition as well as ambition to reduce CO 2 from materials. Although we did not fully realise our 2025 circular business ambition, the work towards the ambition has fostered a circular mindset and actions in the busi - ness. For example, new closed loops have been established for steel, which enabled us to secure a competitive source of recycled mate - rial going forward. These learnings also inform us when setting future ambitions. More information on progress of our ambitions within our circular economy strategy pillar can be found on page 169 and 176. Responsible business As a result of organisational changes during the year, the share of women in senior leadership slightly declined compared to last year. Although the injury rate of 0.06 is slightly above our 2025 ambi - tion it demonstrates a sustained positive long-term trend, reflecting our historically strong efforts in this area. Processes and digital capabilities within our corporate human rights due diligence were enhanced although number of suppler audits decreased. Key figures sustainability 1) 2030 ambition 2025 ambition 2025 2024 Climate Action Reduction of CO 2 emissions per car, % 2) 65–75 30–35 31 32   Reduction of tailpipe emissions per car, % 2) 85–100 50 42 46   Reduction of emissions from materials per car, % 2) 30 25 3 1   Reduction of operational emissions per car, % 2) 30 25 37 25 Electrified car retail sales (BEVs and PHEVs), % 90–100 50–60 46 46 Energy consumption reduction per manufactured car in own operations, % 2) 40 — 10 4 Climate neutral energy in own operations, % — 100 87 78 SBTi Target: Reduction of Scope 1 and 2 emissions, % 3) 60 — 87 74 SBTi Target: Reduction of Scope 3 Use of sold products emissions, % per vehicle kilometre 3) 52 — 23 26 Circular Economy Water withdrawal reduction per manufactured car in own operations, % 2) 50 — 29 20 Estimated impact on biodiversity from Volvo Cars’ value chain, species.year — — 166 177 Recycled and bio-based materials in the fleet, % 30 — 20 20 Recycled and bio-based materials in new car models, % 35 25 19 18 Recirculation rate, % >99 — 95 94 Additional circular business revenue and cost savings, SEKm 2) — 1,000 149 266 Responsible Business Inclusion index, Score and Benchmark Score +3 Score +1 77 (+1) 77 (+1) Women in senior leadership, % 34 YoY improvement 29.1 29.7 Injury rate (Lost Time Case Rate, LTCR) employees =<0.02 =<0.04 0.06 0.05 Gender pay gap, % — Pay equity by 2027 1.7 1.5 High-risk sites in value chain assessed on responsible business conducts on site per year YoY improvement 88 97 Share of addressed RBA VAP audit improvement findings, % 85 92 EU Taxonomy CapEx alignment, % 70 50 28 23 Share of green debt, in accordance with our Green Financing Framework, or sustainability-linked format as percentage of outstanding Debt, % 100 100 98 76 1) Definition and methodology for the figures presented are described in each section 2) Compared to the 2018 base year 3) Compared to the 2019 base year The share of green debt, in accordance with our Green Financing Framework, or sustainability-linked format as a percentage of out - standing debt reached 98 per cent, close to our 2025 ambition of 100 per cent. This financing solution further strengthens our ability to transform towards an electrified portfolio. Revised investment allocation decisions have resulted in a reduced share of EU Taxono - my-aligned investments, limiting our ability to achieve our ambition. More information on progress of our ambitions within our responsi - ble business strategy pillar can be found on page 151 and 183–186. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / GENERAL INFORMATION 136 ===== SIDA 137 ===== CLIMATE ACTION CIRCULAR ECONOMY RESPONSIBLE BUSINESS • Requiring suppliers to implement GHG emis- sion reduction plans and targets, aligned with the Paris agreement • Adopted biofuel for the majority of our inbound intercontinental ocean container transports • Increased share of recycled material and low-emission material in our fleet • Conducted water and biodiversity risk assess- ments for directly contracted suppliers for direct material • Increased share of r ecycled materials in cars to manage environmental impacts • Collected data from supplier sites to verify targets and roadmaps in upstream value chain • Conducted due diligence procedures to safeguard human rights for workers in the value chain • Trained our suppliers in human rights and our Code of Conduct for Business Partners • Enhanced transparency of material origins with battery passports in globally launched models CLIMATE ACTION CIRCULAR ECONOMY RESPONSIBLE BUSINESS • Collaborated with retail partners to lower emis- sions using renewables electricity and effi- ciency measures • Introduced technologi- cal updates to further improve the efficiency of existing models. • Launched bi-directional charging which will support the energy grid system • Enhanced collaboration with retail partners to support resource effi- ciency measures • Expanded focus on repair and refurbish- ment of high value c omponents • Continued efforts to phase out hazardous substances from future products and processes • Launched innovative technology in multi- adaptive safety belt in the EX60 • Trained our retailers in human rights and our Code of Conduct for Business Partners • Set an ambition to be number one in customer satisfaction by 2029 RAW MATERIAL SUPPLIER END OF LIFE TREATMENT TIER-N SUPPLIERS RETAIL PARTNERSOWN OPERATIONS DIRECTLY CONTRACTED SUPPLIERS USAGE AND MAINTENANCE UPSTREAM TRANSPORTATION & DISTRIBUTION DOWNSTREAM TRANSPORTATION & DISTRIBUTION RETAIL UPSTREAM DOWNSTREAM CLIMATE ACTION CIRCULAR ECONOMY RESPONSIBLE BUSINESS • Integrated CO2 and recycled materials in future car programmes with the Sustainability Steering Process • Converted four additional plants to climate-neutral energy and improved energy efficiencies • Conducted physical cli- mate risk assessments • Increased the material utilisation degree to enhance material efficiency and reduce waste • Implemented water- efficiency and mitiga- tion actions all plants and sites in water risk • Generated financial value through circular business initiatives • Completed yearly train- ing on employees in our Code of Conduct and in cybersecurity • Conducted People Policy Assessments to screen labour rights • Increased share of green funding of our sustainable investments OWN OPERATIONS Value chain Key activities Volvo Cars’ upstream value chain includes directly contracted sup - pliers in multiple tiers, but also a vast chain of sub-suppliers, over which Volvo Cars has no direct influence. The supply chain includes sectors such as raw material extraction and component production. In our materiality assessment, these sectors are considered to be major impact drivers in our upstream value chain, due to the resource intensity and potential human rights issues. Our supply chain also includes sourcing for, and production of certain Volvo-branded cars, produced by related parties. The environmental impacts from the production of these cars are not considered as own operation when preparing this statement. However, these cars are accounted for in our indirect emissions of greenhouse gases and are included in our data for sold cars. Volvo Cars own operation is defined with the same organisational boundaries as for the financial reporting and includes the activities to develop, manufacture and sell Volvo cars. In addition, we produce cars on behalf of Polestar as a contract manufacturer. The environ - mental impact from the production of these cars is included as part of own operation and Polestar cars are included in the number of cars manufactured by Volvo Cars. Downstream value chain includes distribution of our products, as well as usage and maintenance, and the end-of-life treatment of products. Certain retailers are subsidiaries and consolidated entities in Volvo Cars and included in information related to own operation. End-of-life treatment is considered as in the design of our products. However, as Volvo Cars does not control the end-of-life treatment, the environmental impacts from dismantling our products and management of materials are considered as part of the downstream value chain and not as own operation. VOLVO CARS’ ACTIVITIES IN THE UPSTREAM VALUE CHAIN VOLVO CARS’ ACTIVITIES IN OWN OPERATIONS VOLVO CARS’ ACTIVITIES IN THE DOWNSTREAM VALUE CHAIN OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / GENERAL INFORMATION 137 ===== SIDA 138 ===== Stakeholder engagement Regular engagement with a range of stakeholders is essential to delivering on our strategic objectives and promoting our brand in a competitive industry. Stakeholder dialogue We engage stakeholders through meetings, conferences, interviews, surveys, consultations and via our Tell Us reporting channel. We collect the views and interests from our employees through employee surveys and continuous dialogue as well as through trade unions. Through our due diligence processes, we interact with work - ers in the value chain, NGOs and communities affected by our activi - ties. In addition, we collaborate with suppliers, competitors and relevant organisations to continuously gather external perspectives. The rightsholder’s perspective is of utmost importance and we continuously consult workers in the value chain, NGOs and trade unions to ensure this perspective is understood and considered Customers are a key stakeholder and we actively seek their input through continuous engagement, including customer surveys. Sus - tainability matters are discussed with investors on a yearly basis. Stakeholder dialogue helps us understand our impact and dependency on our stakeholders, whether they are part of our value chain, the business model or an independent organisation. It allows us to validate our strategy, adjust it where needed, and keep up to date with the latest developments. This also informs us of content in our various sustainability frameworks, such as our position papers. Stakeholder engagement also provides insight into sustainability matters relevant to our double materiality assessment. Public advocacy We collaborate with like-minded companies, national and local authorities, non-governmental organisations and academic institu- tions to advance our sustainability journey and drive positive change across our industry and society as a whole. Through public advocacy and collaboration with our stakeholders, we take an active role in supporting policy development and driving positive change. More information on our public advocacy can be found on page 205. Key stakeholder groups Topics of interest (non-exhaustive) Academia • Climate change • Resource efficiency • Own workforce Authority, Politicians, Governments • Climate change • Resource efficiency • Business conduct Communities • Climate change • Workers in the value chain • Business conduct Customers • Climate change • Own workforce • Safety Employees and Union Representatives • Climate change • Own workforce • Business conduct Industry Associations • Climate change • Workers in the value chain • Resource efficiency Investors and Banks • Climate change • Own workforce • Workers in the value chain Media • Climate change • Own workforce • Workers in the value chain NGOs • Climate change • Own workforce • Workers in the value chain Retailers • Climate change • Safety • Workers in the value chain Suppliers • Climate change • Workers in the value chain • Resource efficiency We participate in independent assessments and engage with ESG rating institutes to monitor and evaluate the sustainability performance of our organisation and our suppliers. We value external opinion and benchmarking against our industry. Sustainability ratings Interval Score Latest assessment CDP Climate D– to A A Dec 2025 CDP Water D– to A B Dec 2025 CDP Forest D– to A C Dec 2025 EcoVadis 1–100 83 June 2025 ISS ESG Corporate Rating D– to A+ B- Jan 2026 MSCI ESG Rating 1) CCC to AAA AA Oct 2025 Sustainalytics ESG Risk Rating overall score 2) Severe (40+) to Negligible (>10) 21.8 Dec 2025 1) The use by Volvo Cars of any MSCI Research LLC or its affiliates (“MSCI”) data, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute a spon - sorship, endorsement, recommendation, or promotion of Volvo Cars by MSCI. MSCI ser - vices and data are the property of MSCI or its information providers, and are provided ‘as-is’ and without warranty. MSCI names and logos are trademarks or service marks of MSCI. 2) Copyright ©2025 Sustainalytics, a Morningstar company. All rights reserved. This section includes information and data provided by Sustainalytics and/or its content providers. Information provided by Sustainalytics is not directed to or intended for use or distribution to India-based clients or users and its distribution to Indian resident individuals or entities is not permitted. Morningstar/Sustainalytics accepts no responsibility or liability whatso - ever for the actions of third-parties in this respect. Use of such data is subject to conditions available at https://www.sustainalytics.com/legal-disclaimers/ Ratings OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / GENERAL INFORMATION 138 ===== SIDA 139 ===== Organisation Topic Commitment Description Sustainability matter Accelerating to Zero BEV transition Acceleration of the transition to zero tail - pipe emission cars A broad coalition of stakeholders committed to enabling the transition to zero-emission mobility. It advocates manufacturing only cars and vans with zero tailpipe emissions by 2040. As members, we aim to facilitate the automotive industry’s transition to full electrification. Climate change Aluminium Forward 2030 Aluminium Membership An International Aluminium Institute gathering industry leaders to drive net zero emissions and other sustainability challenges. Climate change, Water, Biodiversity, Circular economy, Workers in the value chain Better Mining Advocacy Sponsorship Better Mining aims to improve working conditions and strengthen mining communities in areas affected by artisanal and small-scale mining of cobalt, copper, tantalum, tin and tungsten in the Democratic Republic of the Congo and Rwanda. Workers in the value chain CLG Europe Advocacy / Net zero Membership CISL ’s Corporate Leaders Groups unite business leaders committed to supporting the transformation to competitive, sustainable, inclusive economies achieving net zero by 2050. Through evidence-based ideas and engagement with policymakers and peers, they advocate for robust business and policy solutions for sustainability challenges. Climate change Copper Mark Copper Membership The Copper Mark is an independent assurance framework that verifies and certifies that copper production – from mining through smelting and refining – meets strict sustainability standards. The objective is to provide credible, transparent and third-party veri - fied confirmations that metals are produced responsibly. Climate change, Water, Biodiversity, Circular economy, Workers in the value chain Drive Sustainability Sustainability in the auto motive supply chain Membership Drive Sustainability is a network of companies that works to improve all aspects of social and environmental sustainability within the automotive industry. Workers in the value chain Ellen MacArthur Foundation Circular economy Membership The Ellen MacArthur Foundation is a charity committed to creating a circular economy, designed to eliminate waste and pollution, circulate products and materials and regenerate nature. Pollution, Biodiversity, Circular economy Responsible Business Alliance Sustainability in global supply chains Membership The Responsible Business Alliance is an industry coalition dedicated to responsible business conduct in global supply chains. Workers in the value chain Responsible Mica Initiative Responsibly sourced mica Membership The Responsible Mica Initiative is a coalition working to enable a responsible and sustainable supply chain for mica. Workers in the value chain Responsible Minerals Initiative Responsible mineral sourcing Membership The Responsible Minerals Initiative is an organisation dedicated to responsible mineral sourcing in global supply chains. Workers in the value chain Responsible Supply Chain Initiative Sustainability in the automotive supply chain Membership Supporting members, suppliers, and stakeholders within the automotive industry and affiliated industries to strive for more responsible supply chains. Workers in the value chain ResponsibleSteel Steel Membership A global non-profit organisation aiming to maximising use of sustainable steel. We take an active role in setting sustainability standards. Climate change, Water, Biodiversity, Circular economy, Workers in the value chain Science Based Targets initiative Climate action Business Ambition for 1.5°C Provides corporate frameworks for emission reduction targets. We commit to climate targets aligned with limiting global tempera - ture increase to 1.5°C and reaching net zero emissions by 2050. Climate change SteelZero Steel 100% net zero steel by 2050 The SteelZero Initiative is a global corporate initiative to speed up the transition to a net zero steel industry. We commit to using only net zero steel by 2050. By 2030, we aim to achieve a 50 per cent rate by procuring: • Steel produced by a steelmaking site where the steelmaker has a science-based emission target • Lower emission steel (aligning with ResponsibleSteel Decarbonisation progress Level 2) Climate change, Water, Biodiversity, Circular economy, Workers in the value chain UN Global Compact Corporate sustainability Membership Volvo is a founding member of this voluntary UN initiative that seeks to get businesses and firms worldwide to adopt sustainable and socially responsible policies, and to report on their implementation, advancing broader UN goals, such as the Sustainable Development Goals (SDGs). All sustainability matters We Mean Business Coalition Advocacy Fossil to Clean campaign Directs business and policy action to halve emissions by 2030 and accelerate transition to a net zero economy. Climate change WEF First Movers Coalition Aluminium 10% of primary aluminium near-zero emission by 2030 A global coalition leveraging purchasing power behind emerging clean technologies. We have committed that at least ten per cent (by volume) of all our primary aluminium procured annually will be near-zero emissions primary aluminium by 2030 (as per the First Movers Coalition definition). This voluntary commitment is subject to supply and prerequisites approved by Volvo Cars leadership. Climate change, Water, Biodiversity, Circular economy Our sustainability work extends beyond our own operations. We participate in voluntary initiatives with other industry leaders to drive systemic change. The table below outlines some of our voluntary commitments and memberships and how they interact with the sustainability matters included in this statement. Voluntary memberships and commitments OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / GENERAL INFORMATION 139 ===== SIDA 140 ===== Sustainability governance Sustainability is deeply integrated into our govern- ance, in terms of both monitoring performance and reporting. The general principle is that sustainability matters are integrated into existing processes and fora due to their cross-functional nature. This section covers the integration of sustainability into our governance model. The Board of Directors Volvo Cars is governed by the Board of Directors, which consists of ten Board members elected by the shareholders, including the Chief Executive Officer. 70 per cent of the Board consists of independent, non-executive Board members. The share of women in the Board amounts to 40 per cent. In addition, there are three union repre - sentatives and two deputy union representatives in the Board. Our complete Corporate Governance Report, describing corporate governance within the Volvo Car Group, and how the Board of Directors govern Volvo Cars with the support of committees and other governance functions and forums, can be found on page 42 . Candidates for the Board of Directors are proposed by the Nomina - tion Committee to be appointed by the General Meeting of Volvo Car AB (publ). The Nomination Committee considers candidates based on sustainability credentials, automotive industry experience, geographical knowledge relevant for Volvo Cars, and how their background and experience might diversify and strengthen the Board members, ensuring they meet the competence requirements set by Volvo Cars. The current composition of the Board is consid - ered to have an appropriate balance of business expertise and competence in sustainability matters and reporting. In addition, the Board has access to the skills and expertise of the EMT and VOLVO CAR AB (PUBL.) BOARD OF DIRECTORS BOARD OF DIRECTORS COMMITTEES RESPONSIBLE FOR DAY–TO–DAY GOVERNANCE AND DRIVING PERFORMANCE RESPONSIBLE FOR REPORTING AND COMPLIANCE WITH REPORTING REQUIREMENTS RESPONSIBLE FOR SUSTAINABILITY PERFORMANCE IN EACH FUNCTION EMT/EMTe FORA SUPPORTING GOVERNANCE FORUM SUPPORTING GOVERNANCE FUNCTIONS COMPLIANCE COMMITTEESGLOBAL AUDIT OFFICE (GAO) (Reports to Audit Committee) ENTERPRISE RISK MANAGEMENT COMPLIANCE AND ETHICS OFFICE DISCLOSURE COMMITTEEINTERNAL CONTROL PRODUCT BOARD SUSTAINABILITY FINANCE PEOPLE COMMITTEE DIGITAL BOARD SUSTAINABILITY – FUNCTIONAL AREAS EXTENDED EXECUTIVE MANAGEMENT TEAM (EMTe) AUDIT COMMITTEE  CORPORATE BOARD GLOBAL SUSTAINABILITY TEAM (GST) CEO AND EXECUTIVE MANAGEMENT TEAM (EMT) SUSTAINABILITY MANAGEMENT TEAM (SMT) Volvo Cars’ governance is described in the Corporate Governance Report. This chart provides an illustration of the governance and how sustainability functions and teams are integrated in the corporate governance. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / GENERAL INFORMATION 140 ===== SIDA 141 ===== extended EMT (EMTe), the Head of Global Sustainability, as well as external experts when deemed necessary. On a yearly basis, mem - bers of the Board of Directors are required to perform the same Compliance & Ethics training as is mandatory for all employees. The Board of Directors oversees sustainability performance as an integral part of the Group’s strategy. The Board approves sustaina - bility ambitions within the company’s strategy, based on recommen - dations from the CEO and management, and monitors efforts to reach them. The identification of how sustainability matters affect Volvo Cars and its risks and business opportunities as well as impact on sustainability matters is the Board’s responsibility and is further described in the Board’s rules of procedure. The Audit Committee is assigned to oversee sustainability reporting, while overall responsi - bility for sustainability matters in general remains with the Board. Sustainability matters and the impact they may have on Volvo Cars are considered by the Board, who monitors how impacts, risks and opportunities are addressed by management. The Board receives regular reports from management related to sustainability topics and is continuously informed on performance, relevant global sustainability matters, forthcoming sustainability related regulations and the views and interest from external stake - holders. The effect on sustainability is analysed and incorporated in the Board’s strategic and decision-making processes. A double materiality assessment providing information on topics of material importance for Volvo Cars and guiding our strategy is prepared. The assessment methodology is approved by the Audit Committee, and the result and conclusions of the assessment are approved by the Board. More information on the double materiality assessment process can be found on page 145. Role of the CEO and management The President and Chief Executive Officer (CEO) is responsible for the execution of the sustainability strategy and its integration into business operations and the decision-making processes. The CEO’s responsibilities include ensuring that the Board receives regular information about the sustainability issues facing Volvo Cars and information on how Volvo Cars’ strategy is implemented in relation to established sustainability ambitions. The CEO is supported by the EMT and the EMTe. The Chief Strat - egy and Product Officer, member of EMT, is responsible for sustain - ability. The EMT and EMTe regularly discuss and approve sustaina - bility initiatives and investments. The Head of Global Sustainability reports to EMT to ensure cross-functional alignment of sustainabil - ity matters within the Group. The Sustainability Management Team (SMT) ensures the integration and harmonisation of sustainability in Volvo Cars’ strategic and operational work. SMT consists of sustain - ability managers from each department and is led by the Head of Global Sustainability. Organisational responsibilities The operational sustainability work at Volvo Cars is cross-func- tional. Each business function is responsible for its own sustainabil - ity development and ensures alignment with the corporate strategy. Sustainability matters are integrated into existing processes and fora due to their cross-functional nature. The Global Sustainability Team is responsible for day-to-day governance, coordinating strat - egy and ambitions and monitoring the progress of corporate sus - tainability key performance indicators. The Sustainability Finance function coordinates the reporting process and monitors compli - ance with sustainability reporting regulatory requirements. Governance support functions Risk management and internal control processes are an integral part of the sustainability reporting process. The Board of Directors is responsible for ensuring that Volvo Cars maintains appropriate and effective internal control and internal audit functions. Enterprise Risk Management Enterprise Risk Management (ERM) aims to improve decision-mak - ing, proactively protect the fulfilment of strategies and plans, and protect assets. The risk management process supports the identifi - cation, management and monitoring of critical risks, including sus - tainability risks. The risk assessment approach, including how risks are prioritised and managed, is further described on page 36. The double materiality assessment incorporates impact areas from our risk management framework in the identification and assessment of the sustainability-related financial risks. The material financial risks identified in our double materiality assessment are included in ERM’s scope for risk response. Each function is responsible for mini - mising financial exposure of each identified sustainability risk. As a part of the ERM process, the Global Sustainability Team oversees how sustainability risks are identified within the process and how response strategies are developed within each relevant function. Twice per year, the company’s top risks are reported in an ERM report to the Audit Committee and Board of Directors. The reported top risks comprise a consolidated list aligned with the COSO-frame - work and concurred by an ERM Core team of senior leaders repre - senting cross-company functions. Internal control The Internal Control function is responsible for supporting the organisation in defining effective and efficient internal controls for sustainability reporting, and for maintaining the internal control framework. Risks identified in the reporting process are continuously evaluated and internal control activities are implemented to enhance the quality and efficiency of reporting. In the reporting process, implementation of internal controls is based on the risk prioritisation methodology, considering risk factors such as maturity of the process, complexity of data, degree of man - ual input and historical misstatements. Accordingly, in 2025, the internal control focus has been to assess existing internal controls related to environmental activity data and workforce data to identify design improvements of the implemented controls. The scope of internal controls includes general IT controls on critical systems, operational controls and entity level controls, covering environmen - tal, social and governance topics with both quantitative and qualita - tive data. The internal control scope also includes ensuring a sound governance structure within sustainability. The Internal Control function is responsible for training the organ - isation about internal controls and monitoring the compliance against the internal control framework. The Audit Committee is informed on the status of the implementation of internal controls, potential gaps and findings on a regular basis. Other supporting functions The Global Audit Office independently assesses the adequacy and effectiveness of governance, internal controls and risk management processes related to sustainability. It reports to the Audit Committee. The Compliance & Ethics Office, supporting responsible and ethi - cal operations, is further described on page 201. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / GENERAL INFORMATION 141 ===== SIDA 142 ===== Sustainability frameworks Code of Conduct and Corporate Policies The Volvo Car Group’s Code of Conduct reflects our values, culture and how we drive results in an ethical and responsible manner. The Code of Conduct is based on international conventions and declara - tions, such as the International Bill of Human Rights, the Fundamen - tal Conventions of the International Labour Organization (ILO) and the UN Global Compact’s Ten Principles. The Board of Directors has adopted twelve Corporate Policies that are part of our Code of Conduct which apply to employees within our operations. Corporate Policies and Directives are continuously reviewed and updated when there are changes in Volvo Cars’ business activity, legal requirements, compliance best practices or identified weaknesses. Reviews are performed at least once every two years. The People Policy is further described on page 182. The Anti-Corruption Policy, Conflict of Interest Policy, Data Protection Policy, Competition Law Policy, Trade Sanctions and Export Control Policy and Internal Reporting Policy are further described on page 201. The principles stated in the Corporate Policies are further operationalised and detailed in related Corporate Directives and guidelines. Our Code of Conduct for Business Partners sets standards for business conduct throughout our value chain. The Code of Conduct for Business Partners is an integral part of any existing business relationship with Volvo Cars and is incorporated by reference into the different business partner agreements. It is approved by the EMT. The Code of Conduct for Business Partners was updated in 2025 to reflect legal developments, evolving stakeholder expecta - tions, and Volvo Cars’ sustainability strategy, providing clearer guid - ance on key areas including: • People and Human Rights – strengthening responsible sourcing • Environmental Responsibility – elevating our commitment to reducing environmental impact and protecting ecosystems • Integrity and Compliance – reinforcing ethical decision-making and business integrity The CEO is accountable for the implementation and enforcement of the Code of Conduct and Corporate Policies, and all employees undergo mandatory annual Compliance & Ethics training to ensure adherence. Our Code of Conduct and Code of Conduct for Business Partners are available on our website. Statements and position papers In Volvo Cars’ Commitment to Sustainability, we set out the direc - tion to become a net zero, nature-positive and circular business while safeguarding human rights across our value chain. By embed - ding sustainability into all operations and working closely with busi - ness partners, customers and other key stakeholders, we aim to lead the transition to sustainable mobility and create long-term value for society and our business. VOLVO CARS’ ADOPTED CORPORATE POLICIES Protection of Company Assets Policy People Policy Communication Policy Conflict of Interest Policy Confidentiality Policy Anti- Corruption Policy Trade Sanctions and Export Control Policy Data Protection Policy Internal Reporting Policy Intellectual Property Policy Insider Policy Competition Law Policy We issue position papers regarding environmental, social and gov - ernance statements, including our Human Rights Statement. Our position papers reflect Volvo Cars’ position on a specific topic, while still considering stakeholders’ interest related to scope and content. The position papers are approved by the Corporate Board, which is established by the EMT. On a yearly basis, these are reviewed and updated if there are significant changes. Our Human Rights Statement, Commitment to sustainability and position papers are available on our website. Cross-topical position papers Several of our published position papers address a wide range of sus- tainability matters, highlighting how these topics are interconnected. Our position paper on sustainable material addresses the sustain - ability challenges of steel, plastics and other materials used in our cars. Material-related sustainability matters include CO 2 emissions, generation of pollution, water scarcity and biodiversity loss. We define materials as sustainable if they meet requirements across our three strategic pillars. Sustainable materials should, amongst other things, be responsibly sourced and have a lower environmental impact than those from corresponding primary sources. The position papers for sustainable steel and plastics further outline details of these materials and our position. Our position paper on circular economy guides our resource flows across our value chain. It includes the application of circular princi - ples, use of secondary raw materials, avoidance of waste and pollu - tion and resource efficiency. Cross-topical position paper Areas covered Sustainable material • Climate change • Pollution • Water • Biodiversity and ecosystems • Resource use and circular economy Sustainable steel • Climate change • Water • Biodiversity and ecosystems • Resource use and circular economy Sustainable plastics • Climate change • Biodiversity and ecosystems • Resource use and circular economy Circular economy • Pollution • Biodiversity and ecosystems • Resource use and circular economy OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / GENERAL INFORMATION 142 ===== SIDA 143 ===== Environmental management system Volvo Cars maintains a comprehensive environmental management system to ensure continuous improvement and to support us in meeting compliance obligations and reducing negative environmen - tal impact. Most of our operations and functions, including all our manufacturing sites, are certified to the ISO 14001 environmental management standard, providing a structured framework to monitor performance, manage risks, and drive progress toward our sustaina - bility ambitions. This certification underlines our commitment to responsible operations, transparency, and accountability across our global footprint. Integration of sustainability-related performance in incentive programmes Sustainability-related conditions are part of the incentive pro - grammes granted to executives and senior leaders. The remunera - tion to the Board is not dependent on any sustainability-related performance conditions. The share-based incentive programme Performance Share Plan (PSP) is a long-term programme issued to senior leaders in which the participants are granted a conditional award of Performance Shares, based on each PSP participants’ gross annual base salary. The sustainability-related conditions refer to the fulfilment of the ambitions related to reduction of CO 2 emission per car and the gen- der diversity calculated as the share of women in senior leadership. The proportion of the sustainability conditions varies between programme years. For the programme adopted at the Annual Gen - eral Meeting in 2025, gender diversity condition accounted to 10 per cent and CO2 reduction for 20 per cent of the total target weighting. More information on the performance conditions for the current programmes can be found on page 80. The conditions for new incentive programmes are proposed by the People Committee, approved by the Board, and subject to approval by the Annual General Meeting. The conditions for already established programmes remain unchanged during the programme period. The guidelines for executive remuneration can be found on page 34 and more information of the programmes can be found in the remuneration report. Sustainability due diligence We have a well-established history of due diligence activities and continuously work to refine and enhance our processes. With the forthcoming EU Corporate Sustainability Due Diligence Directive (CSDDD), we have further improved our processes within both social and environmental due diligence. Due diligence process Our due diligence process enables us to gain knowledge and under - standing of our impacts, risks and opportunities. It also informs our strategy and the actions we approve. Engaging with rightsholders and other stakeholders is a vital part of due diligence. Our identified key rightsholder groups include own workforce, workers in the value chain and customers. In addition, affected communities are consid - ered in our dialogues. Our process, based on OECD Due Diligence Guidance for Respon - sible Business Conduct, aims to identify, prevent and mitigate actual and potential negative impact on the environment and people within our value chain. Our due diligence process is divided into the following stages: 1. Embed responsible business conduct into our policies, contracts and management systems. 2. Identify and assess adverse impact directly linked to our operations, products, services and business relationships, or adverse impact to which we contribute. 3. Cease, prevent or mitigate potential and existing negative impact and, where appropriate, provide, or cooperate to provide, remedi- ation. 4. Track the effectiveness of due diligence processes and measures. 5. Communicate how identified potential and actual negative impacts are addressed. Our Statement on due diligence can be found on page 213 . International commitments At Volvo Cars, we are committed to adhering to internationally rec - ognised human rights standards and guidelines. We are founding members of the UN Global Compact and observe its Ten Principles. We include the aims of the following conventions and guidelines in our Code of Conduct, Code of Conduct for Business Partners and our Human Rights Statement: • The International Bill of Human Rights • The UN Convention on the Rights of the Child • The fundamental conventions as set out in the ILO Declaration on Fundamental Principles and Rights at work • The UN Guiding Principles on Business and Human Rights • OECD Guidelines for Multinational Enterprises on Responsible Business Conduct • OECD Due Diligence Guidance for Responsible Business Conduct • OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. Several conventions and guidelines form the basis of human rights due diligence legislation. These include for instance Modern Slavery Acts in Australia and the UK, the Transparency Act in Norway, Cana - da’s Bill S-211, the EU’s Taxonomy Minimum Safeguards criteria and CSDDD. We support these developments and recognise the need to expand the remit of legislation. Our UN Global Compact Communi - cation of Progress report is published on the UNGC website. SCHEMATIC OVERVIEW OF VOLVO CARS’ ENHANCED DUE DILIGENCE PROCEDURES 5 4 2 3 1 Remediate Embed responsible business conduct Communicate Identify and assess Track effectiveness Cease, prevent, m itigate Rightsholder engagement OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / GENERAL INFORMATION 143 ===== SIDA 144 ===== Salient Human Rights Issues Volvo Cars has performed a saliency assessment in line with inter - national guidelines to identify our most salient human rights issues (SHRIs). The scope of the assessment covered actual and potential adverse human rights impact that Volvo Cars may cause or contrib- ute to through our own activities, or which may be directly linked to our operations, products, or services via our business relationships. The identified SHRIs are: • People’s access to clean, healthy and sustainable environments • People’s rights to health and safety • Modern slavery (including forced labour) • Child labour • Threat or occurrence of abuse or violence There are several other potential human rights risks in our value chain, including but not limited to, adverse impact on decent work - ing conditions, discrimination, privacy, and the rights of indigenous and vulnerable people. Human rights risk assessment of the value chain We perform annual human rights risk assessments using geographi - cal data about our value chain presence, external risk indices for our identified SHRIs, previous due diligence results, and input from con - sultations with experts and rightsholders. Based on these annual assessments, we develop the human rights due diligence plan for the following year that aims to cease, prevent, mitigate and remedy potential or actual human rights infringements in our value chain. The 2024 human right risk assessment identified people at higher risk in our value chain in the following countries: Bolivia, Brazil, China, Colombia, Democratic Republic of the Congo, India, Indone - sia, Madagascar, Malaysia, Mexico, Myanmar, Peru, Philippines, Sudan, Turkey, Uganda, Vietnam, United Arab Emirates and Zimba - bwe. The risk assessment served as the basis for the 2025 human rights due diligence across our value chain. The due diligence plan for 2025 included enhanced due diligence in our supply chain, People Policy Assessments in our operations, and human rights due diligence processes for retailers and importers. More information on our human rights due diligence activities can be found on page 186 and 191. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / GENERAL INFORMATION 144 ===== SIDA 145 ===== Materiality assessment Our double materiality assessment allows us to identify impacts, risks and opportunities, and to develop our sustainability strategies and operations. In 2025, our assessment was prepared following the ESRS requirements, whereas last year’s assessment was based on the GRI Standards. There has been no significant change in the methodology used to prepare the double materiality assessment as a result of this change in reporting standard. We continuously develop our method - ology to ensure accuracy and completeness, as well as its relevance for internal and external stakeholders. Methodology Our process for identifying and assessing impacts, risks and oppor - tunities includes several steps and is follows a top-down approach, based on the ten topical standards described in ESRS. Each topical standard is screened to identify potential and actual impacts, risks and opportunities from a gross perspective. Each identified impact, risk and opportunity is assessed for materiality based on the sever - ity of the impact and the size of the financial risk and opportunity, along with the likelihood of the occurrence. This creates a quantifia - ble methodology for grading and determining the materiality of each scenario and whether each impact, risk or opportunity is actual or potential. Using internally developed thresholds, each impact, risk and opportunity is evaluated for its materiality. The thresholds are developed to determine a suitable level of disclosures considering the views and interest of stakeholders. Whenever a sustainability matter is above the threshold, it is deemed material and included in the Sustainability Statement. Based on the outcomes of the materi - ality assessment, a final evaluation is conducted to verify the com - pleteness and reasonableness of the results. This includes reviewing identified topics, validating their relevance, and ensuring that the conclusions are consistent. The input used to identify and assess our impacts, risks and opportunities is further described below. The preliminary result of the assessment is validated with the sustainability functions across the company and executive manage - ment, before it is approved by the Board. Time horizon and value chain considerations Impact and financial materiality are evaluated and assessed based on where in the value chain they occur. The full value chain, covering the complete life cycle perspective, is considered in the identifica - tion and assessment, with special focus on specific activities or geo - graphical areas identified as areas of higher impact. An illustration of the value chain is found on page 137. Materiality assessments are evaluated across three time horizons: Short-term (up to one year), medium-term (one to five years) and long-term (more than five years) Assessing impact materiality We assess the severity and likelihood of impact in each sustainabil - ity matter. Severity is defined by the scale, scope and capability to remedy impact, which all are weighed equally in the severity assess - ment. The materiality assessment identifies both positive and nega - tive impacts, and the capability to remedy is not considered for pos - itive impacts. Given the significant impact certain human rights issues can have, it is essential to ensure that their severity is not underestimated due to considerations of likelihood. As a result, the severity of impacts related to human rights takes precedence over likelihood in the overall assessment. Assessing financial materiality We assess our dependencies, related or unrelated to our impacts, and scenarios that may result in financial risks and opportunities. These are evaluated for potential financial effects and likelihood, and the materiality is determined based on predetermined thresh - olds in line with the ERM process. Identification and assessment of financial risks are based on risk categories, such as direct financial impact, strategic or operational impact, reputational effects, supply chain disturbance or compliance-related concerns. The identified material financial risks are included in the ERM process, in which all risks are prioritised in accordance with the overall risk approach for the Group. More information on the ERM process is found on page 36. Financial opportunities are addressed by the business function to which the opportunity is related. Input used to identify and assess impacts, risks and opportunities To conduct the double materiality assessment, we obtain and evalu - ate input to identify our impact and dependency. This input is obtained from sources including stakeholder dialogues, external tools and reports and internal sustainability experts. The environ - mental aspects evaluation, performed in accordance with ISO 14000, provides central input for the impact materiality assessment on environmental topics. Stakeholder dialogue is important for us to understand the impact we have on people and the environment. Consultations are regularly conducted with the residents of areas within close vicinity to our main production sites. The below summa - rises the supporting data used to identify and analyse actual and potential impacts, risks and opportunities across our value chain. Climate change We assess our impact of climate change using both the life cycle analyses (LCA) of our products and calculated CO 2 emissions across our value chain. Financial risks and opportunities due to climate change are based on scenario analyses. The transitional risk scenario analysis uses three IEA scenarios: Stated Policies Scenario (STEPS), Announced Pledges Scenario (APS) and Net Zero Emissions by 2050 Scenario (NZE). Analyses are conducted to identify the potential risks and opportunities throughout our value chain, assessing our geographi - cal locations, our products, and the markets we conduct business in. The assessment includes potential events that may have positive or negative effect on Volvo Cars’ business, such as regulatory changes, technological transition, raw materials prices and reputational risks. Climate change increases the frequency of chronic or acute haz - ards, such as flooding, storms and heat stress, that may disrupt our operations and threaten the safety of our employees and people in our value chain and local communities. Volvo Cars considers the IPCC’s science for vulnerability and risk analysis by using an estab - lished model to assess physical risks. IPCC’s RCP2.6, RCP4.5 and RCP8.5 scenarios for the current year, as well as 2030, 2050 and 2100 are used to generate overall and specific risk scores. The geo - graphical location of our sites is cross-referenced against the risk OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / GENERAL INFORMATION 145 ===== SIDA 146 ===== factors in each scenario to identify site-specific climate-related hazards. Major and critical sites, located in areas with high exposure to physical risks, are further assessed to determine the materiality of the physical climate risks on our operations. When identifying and assessing physical risks, our defined time horizons are applied. The expected lifetime of assets in the assessment for physical risks exceeds five years while the strategic planning and capital allocation plans are usually prepared on a time horizon of up to five years. There are no significant assets or business activities that are incom - patible with or need significant efforts to be compatible with a tran - sition to a climate neutral economy. Energy consumption is a significant source of emissions in our value chain, especially from producing materials for cars and power - ing them during their use. We identify and assess risks related to energy by analysing variables that could influence both the availa - bility of energy supply and energy prices. Major variables include price volatility metrics, grid reliability indicators, the status of underdeveloped energy systems in certain markets, geopolitical trade wars, regulatory tariff structures, and local capital investment decisions. The impacts of these variables compound the risks asso - ciated with the energy transition. Pollution The International Material Data System (IMDS) is used to identify Substances of Concern (SoC) and Substances of Very High Concern (SVHC) in our products. We apply the Locate, Evaluate, Assess and Prepare (LEAP) approach for pollution to air, soil and water to analyse the emission level of pollutants and compare them on a site-level against the thresholds as defined in Annex II of the E-PRTR Regulation (Euro - pean Pollutant Release and Transfer Register) to determine whether our emissions are material. We apply a risk-based approach in selecting sites to evaluate and different methodologies are used to either directly measure or estimate the emissions. The impact assessment in our value chain is based on LCA reports with specific focus on ecotoxicity in aquatic and terrestrial ecosys - tems, in which pollution is a direct impact driver on ecosystems. The impact assessment methodology is further described in the biodi - versity section below. Risks and opportunities are assessed from an impact and dependency perspective. The ENCORE (Exploring, Natu - ral Capital Opportunities, Risks and Exposure) database is used to assess dependencies from our industry related to pollution. Water The LEAP approach is applied to assess the impact on water. We ana - lyse the sites of our own operations and directly contracted supplier for direct material to identify sites located in areas at water risk and areas of high-water stress. Our analysis is based on recommendations and guidelines in the Corporate Guide to Water Management from WBCSD and UN Global Compact’s CEO Water Mandate. In the risk assessment, internal and external risk management tools such as World Resources Institute (WRI) Aqueduct Water Risk Atlas 4.0, and the World Wildlife Fund (WWF) Water Risk Filter are used. Our impacts and dependencies on water are analysed, especially in water risk areas, to identify transitional and physical risks and oppor - tunities in our business or in the value chain. Biodiversity We conduct several levels of impact assessment, guided by the Science Based Targets Network (SBTN) and the LEAP approach, to evaluate how economic activities in our value chain impact nature. The specific assessments made on material, product and enterprise level have been done with the LCA methodology ReCiPe2016. This method assesses impacts on all pressure categories defined by SBTN and in line with the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) pressure framework. The analysis is based on the material breakdown of our products, data from running our operations, and data concerning the usage of our products over a 20-year period. The output from the assessment results in a metric called ‘species.year’, which provides the impacts on all pressure categories separately. Scenarios representing different future changes to our products, for example, a transition to fully electric cars and higher degrees of recycled material, are analysed. Using the Integrated Biodiversity Assessment Tool (IBAT) tool, we assess the risk of physical impact to sensitive areas by conducting an analysis of the location of our operational sites in relation to Key Biodi- versity Areas (KBA). All operational sites are assessed, with extra focus on the five production sites which lie within a 5km radius of KBA areas. We use ENCORE and ISIC classes (manufacture of motor vehicles and construction of buildings) to explore the potential physical impacts from our main activities on the production sites and conduct sectori - al-level screening of the natural capital assets on which economic activity in our value chain depends. The impacts of these ISIC classes in ENCORE depict higher impacts related to emission of toxic pollutants to water and soil, emission of GHG and non-GHG pollutants and distur- bances from noise and light pollution. This impact analysis guides our deeper analysis of actual impacts on individual sites. Resource use and circular economy Our LCA reports, including material breakdown analyses of our prod - ucts, in combination with the total volume of cars produced, packag - ing material and waste in our operations, provide information on the resources used throughout our operations. The supply chain resource use is assessed using established estimations on raw mate - rial extractions and production of components for key material in our products. Financial risks are assessed using the ENCORE database to analyse dependencies within certain sectors and resources which are important to our operations. Own workforce and workers in the value chain We assess impacts, risks and opportunities related to workers in our operation and across our value chain through due diligence proce - dures, People Policy Assessments and risk workshops. Both employ - ees and non-employees, covering white- and blue-collar roles, as well as permanent and temporary employees, are considered in the materiality assessment. For our own workforce, we conduct regular employee surveys and maintain ongoing dialogue, either directly with our employees or through trade unions. The due diligence scope is determined by the identification and assessment of salient human rights issues and our annual human rights risk assessments, which also serve as input for the double materiality assessment. A gross list of human rights issues was prepared and analysed across risk cate - gories such as environmental, social and governance, place in value chain, potential rightsholders, vulnerable groups, geographical focus, and potential human rights impacts. The assessment was con - ducted by identifying various factors that could potentially contrib - ute to the risk of negative impact on human rights. The factors were examined and analysed and further linked to the salient human rights issues identified and extracted from the gross list. More information is found on page 144. Reporting through our grievance channels provides information on potential and actual impacts. Consumers and end-users All our consumers and end-users are considered in the materiality assessment, including passengers and other vulnerable road users. The assessment is based on data obtained from various surveys, market analysis of customer trends and internal data obtained from the products and services our customers use. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / GENERAL INFORMATION 146 ===== SIDA 147 ===== Business conduct The identification of impacts, risks and opportunities related to business conduct is based on activity data (such as reporting made in our grievance channels and reports from internal audits per - formed on our governance and business conduct), risk assessments (such as our yearly value chain risk assessment and entity specific risk assessments), stakeholder input (such as adverse media, NGO and industry association reports), and global risk indices and lists. Volvo Cars conducts business on a global scale, including in the high- risk countries identified in our assessment, which, together with affected law and legislation and the business cultures in these coun- tries, affects the scope and conclusions of our assessment. Outcome of the double materiality assessment The detailed result from the double materiality assessment is found in each respective section. All material impacts, risks and opportu - nities are covered by ESRS Disclosure Requirements. Based on this year’s updated assessment, minor changes have been made compared to last year’s result. For example, by finalising our dam construction project in Olofström, we have eliminated the financial risk related to flooding risk highlighted in previous years’ reports. Additionally, a new assessment of the valuation of existing assets related to the production of cars with internal combustion engines was performed, resulting in a very low risk for impairment. Connectivity with the Financial Statements Sustainability considerations, such as environmental changes, have been factored into our Consolidated Financial Statements. This includes how sustainability may impact critical accounting esti - mates, which is used for asset valuation, provisions, contingent lia - bilities. The climate-related scenarios used for the double material - ity assessment are used for the critical climate-related assumptions made in the Consolidated Financial Statements. The accounting methodology for valuation of tangible and intan - gible assets is found on page 89 and 91. Sustainability-related financial risks are recognised as a provision or disclosed as a contin - gent liability, if certain criteria are met. In preparing the Consoli - dated Financial Statements for 2025, no sustainability-related financial risks have been recognised as provision and no contingent liabilities are disclosed. The accounting methodology for provisions and contingent liabilities is found on page 111 and 112. MATERIAL SUSTAINABILITY MATTERS ALONG THE VALUE CHAIN ENVIRONMENTAL IMPACT MATERIALITY FINANCIAL MATERIALITY PAGE CLIMATE CHANGE 153 POLLUTION 164 WATER 167 BIODIVERSITY 170 RESOURCE USE AND CIRCULAR ECONOMY 173 SOCIAL OWN WORKFORCE 180 WORKERS IN THE VALUE CHAIN 189 AFFECTED COMMUNITIES — CONSUMERS AND END-USERS 195 GOVERNANCE BUSINESS CONDUCT 199 MATERIAL NOT MATERIAL OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / GENERAL INFORMATION 147 ===== SIDA 148 ===== Environmental information EU Taxonomy Report PAGE 149–152 Climate change PAGE 153–163 Pollution PAGE 164–166 Water PAGE 167–169 Biodiversity and ecosystems PAGE 170–172 Resource use and circular economy PAGE 173–178 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 148 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 149 ===== Introduction The EU Taxonomy Regulation (hereafter referred to as the Taxon - omy) is a classification system for environmentally sustainable activities, designed to support the EU’s climate and energy targets. These are part of the objectives of the European Green Deal to scale investments in sustainable projects and activities. To comply with the Taxonomy, we must report on our taxono - my-eligible and aligned activities for turnover, capital expenditure (CapEx) and operational expenditure (OpEx). To be aligned with the Taxonomy, we must fulfil the technical screening criteria for sub - stantial contribution to one of the environmental objectives and ensure compliance with the Do No Significant Harm (DNSH) criteria for the remaining environmental objectives. The environmental objectives are: • Climate Change Mitigation (CCM) • Climate Change Adaptation (CCA) • Sustainable Use and Protection of Water and Marine Resources (WTR) • Transition to a Circular Economy (CE) • Pollution Prevention and Control (PPC) • Protection and Restoration of Biodiversity and Ecosystems (BIO) To align with the Taxonomy, we must also meet certain minimum safeguard criteria, ensuring compliance with standards related to responsible business conduct, such as human rights, corruption, taxation and fair competition. For 2025, the report has been prepared considering the new Delegated Regulation (EU) 2026/73. Assessment of eligibility and materiality Using the definitions of economic activities in the Taxonomy to iden - tify eligible activities, and following the Delegated Regulation (EU) 2026/73, we assessed the materiality of each Taxonomy -eligible economic activity against our total turnover, CapEx and OpEx. EU Taxonomy Report Economic activities that accounted for less than 10 per cent of the relevant KPI denominator are treated as non -material and reported separately, as not assessed activities considered non-material. Activities CCM 3.18 Manufacture of automotive and mobility components (Manufacturing sector) and CE 5.4 Sale of sec - ond-hand goods (Services sector) were below 10 per cent individu - ally for each KPI. For turnover the aggregated proportion of those two activities however exceeded 10 per cent. Following this, and due to its relevance to our business, activity CE 5.4 was assessed to be material for turnover and subsequently CCM 3.18 was assessed to be non-material for all KPIs and not further assessed for alignment. Activity CCM 3.3 Manufacture of low carbon technologies for transport, is eligible and material for all three KPIs. It covers the development, manufacture and sale of Volvo-branded cars. We do not include our contract manufacturing activities for third parties. Activity CE 5.4 covers the sale of used cars. Non-material activities were not removed from KPI denominators, ensuring the use of materiality thresholds did not lead to the exclu - sion of any portions of activities from our reported KPIs. Assessment of alignment For activity CCM 3.3, Volvo-branded cars co- developed with, or contract-manufactured by, related parties are not considered aligned in 2025 and are therefore excluded from further assess - ments against the technical screening criteria. Activity CE 5.4 has been assessed to not be aligned with the technical screening criteria. Substantial contribution Climate change mitigation Cars with tailpipe emissions of less than 50 grams of CO 2 per kilo- metre meet the climate-mitigation technical screening criteria for activity CCM 3.3. In 2025, all fully electric cars and the majority of our plug-in hybrid cars met these criteria. As of 2026, the criteria changes to 0 grams of CO 2 per kilometre, meaning that only fully electric cars will comply. Do No Significant Harm (DNSH) Climate change adaptation We continuously assess our compliance with the DNSH to climate change adaptation criteria through our climate risk assessments of our operational sites. Material physical climate risks have been iden - tified, and a robust climate risk and vulnerability assessment has been performed. This included assessment of adaptation solutions for physical climate risk and considered IPCC pathways 2.6, 4.5 and 8.5, with the time horizons 2030, 2050 and 2100. In our assessment, we fulfil the DNSH to climate change adapta - tion criteria for activity CCM 3.3. More information on our climate change adaptation activities can be found on pages 145, 156 and 158. Sustainable use and protection of water and marine resources We assess our compliance with the DNSH to water criteria for activ - ity CCM 3.3 through gap analyses. The analyses are based on work related to production permits, including Environmental Impact Assessments (EIA), which have been conducted for all our manufac - turing sites, and water risk assessments. All analyses are carried out taking local legislation into account. In our assessment, we fulfil the DNSH to water criteria for activity CCM 3.3. More information about our work with responsible water manage - ment can be found on page 167. Transition to a circular economy We assess our compliance with the DNSH to circular economy crite - ria for activity CCM 3.3 by evaluating the potential of implementing techniques that support circular economy. These include the use of recycled content and product design that considers durability, recy - clability and reusability. We have also set ambitions to increase the use of recycled content. We also assess whether our waste management practices priori - tise recycling over disposal and ensure traceability of substances of concern (SoCs) and substances of very high concern (SVHCs) across all products. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 149 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 150 ===== Within our SoCs and SVHCs policy we trace substances using the International Material Data System (IMDS), an online platform used within the automotive industry. In our assessment, we fulfil the DNSH to circular economy criteria for activities CCM 3.3. More information on our circular economy activities can be found on page 173. Pollution prevention and control We assess our compliance with the DNSH to pollution prevention criteria for activity CCM 3.3 by evaluating whether we manufacture, place on the market or use SVHCs referenced within Appendix C of the Taxonomy. We do not manufacture or place SVHCs in their pure form on the market. However, SVHCs on the EU REACH candidate list are used in our manufacturing processes and as part of several car components. The DNSH criteria are considered met if it is assessed and docu - mented by the operators that the substances are used under con - trolled conditions and that no other suitable alternative substances or technologies are available on the market. We are using the substances under controlled conditions and are currently evaluating the availability of suitable alternative sub - stances or technologies as part of our CapEx plan, as further described in the CapEx Plan section. In our assessment, we do not fulfil the DNSH to pollution preven - tion criteria for activities CCM 3.3, regarding currently produced cars. More information on our pollution related work can be found on page 164. Protection and restoration of biodiversity and ecosystems We assess our compliance with the DNSH to biodiversity criteria for activity CCM 3.3 through gap analyses. The analyses are based on work related to production permits, including Environmental Impact Assessments (EIA), which have been conducted for all our manufac - turing sites, and key biodiversity area assessments. All analyses are carried out taking local legislation into account. In our assessment, we fulfil the DNSH to biodiversity criteria for activity CCM 3.3. More information on biodiversity can be found on page 170. Minimum safeguards To comply with the criteria for minimum safeguards, we must align with OECD Guidelines for Multinational Enterprises and the UN Guid - ing Principles on Business and Human Rights. In accordance with the minimum safeguards on human rights, we have conducted an assessment using the best available information. Based on this, we assess that our operations comply with these mini - mum safeguards. In our evaluation, we have: • Established adequate human rights due diligence processes, as outlined in the UN Guiding Principles and the OECD Guidelines for Multinational Enterprises. • Not been held liable or found to be in breach of labour law or human rights in certain types of court cases on labour law or on human rights. • Not declined requests to engage with a National Contact Point (NCP) or other relevant parties and have not been found to contra - vene the OECD Guidelines by an NCP. • Been the subject of allegations from the Business and Human Rights Resource Centre (BHRRC) and have responded to those allegations. More information on our human rights policies and due diligence processes can be found on page 143. In accordance with the minimum safeguards on corruption, taxa - tion and fair competition, we have conducted an assessment using the best available information. Based on this, we assess that our operations comply with these minimum safeguards. Our evaluation considered: • Anti-corruption processes and any convictions of corruption for senior management (including senior management of subsidiaries). • Treatment of governance and compliance as important elements of oversight. • Adequacy of tax risk management strategies and processes (including subsidiaries) and violation of tax laws. • Promotion of the importance of compliance with all applicable laws and regulations amongst our employees. • Convictions of violating competition laws for senior management (including senior management of subsidiaries). More information on our anti-corruption and fair competition proce - dures can be found on page 200. Accounting Policies and Key Performance Indicators Turnover In the calculation of the proportion of eligible turnover, we have used Volvo Cars’ total revenue as a denominator, see Note 2 – Reve - nue on page 72, and allocated eligible turnover to activity CCM 3.3, including turnover related to the sale and leasing of new cars, and CE 5.4, including the turnover related to the sale of used cars. The numer- ator for turnover is the aligned proportion of each economic activity. Capital Expenditure (CapEx) In the calculation of the proportion of eligible CapEx, we use Volvo Cars’ additions for tangible assets, including right-of-use assets and assets acquired through business combinations, see Note 16 – Tan - gible assets on page 91, and intangible assets, excluding trademark and goodwill, see Note 15 – Intangible assets on page 89, as a denom- inator. We allocated eligible CapEx to activity CCM 3.3, mainly relat- ing to product development and investments in property, plant and equipment. Some common investments are not allocated to eligible activities. Activities that are deemed taxonomy-aligned use a numerator based on the CapEx plan. Operational Expenditure (OpEx) In the calculation of the proportion of eligible OpEx that forms the denominator, we include Volvo Cars’ expenses related to research and development, short-term leases, and our property, plant, and equipment (such as maintenance and repair). Eligible OpEx is allo - cated based on expenses related to activity CCM 3.3. Activities that are deemed taxonomy-aligned use a numerator based on the CapEx plan. Taxonomy reporting of OpEx is not com - parable with other operating expenses in the Consolidated Income Statements. CapEx Plan The Taxonomy requires a distinction between CapEx and OpEx for activities that are currently aligned and CapEx and OpEx that intend to expand aligned activities or upgrade activities for future alignment. In 2023, our executive management approved a CapEx plan with the purpose of increasing our alignment with activity CCM 3.3 within five years. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 150 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 151 ===== As described in the pollution prevention and control section on the previous page, we do not currently fulfil the DNSH criteria for pollu - tion prevention and control. As part of our CapEx plan and commit - ment for future alignment, we have developed an operational action plan to address the use of SVHCs in our products and manufacturing processes. This includes collaboration with suppliers to reduce the presence of SVHCs and investigate the availability of suitable, alter - native substances or technologies. The CapEx plan outlines how we aim to align current activities and includes investments that support taxonomy-aligned products and manufacturing processes. This is also applied to OpEx associated with these investments. Projected CapEx and OpEx in the remaining period covered by the CapEx plan is expected to stay at current levels in relation to total investments. Additional commentary In 2025, taxonomy-aligned CapEx increased to 28 (23) per cent. This was due to a maintained level of investments in assets covered by the CapEx Plan in combination with a lower level of total invest - ments. Compared with our ambition to reach 50 per cent CapEx alignment by 2025, the lower actual outcome was mainly driven by the prolonged bridge to full BEV transition resulting in a reconsider - ation of related investments. We remain committed to full electrifi - cation while continuing to offer plug-in hybrids to those customers not yet ready for full electrification. All turnover, CapEx and OpEx values in other currencies have been converted to SEK. In calculating the key performance indicators, we ensure no double counting of values occurs. Proportion of turnover, CapEx, OpEx from products or services associated with Taxonomy-eligible or Taxonomy-aligned economic activities – disclosure covering year 2025 (summary KPIs) Breakdown by environmental objectives of Taxonomy aligned activities KPI Total Proportion of Taxonomy eligible activities Taxonomy aligned activities Proportion of Taxonomy aligned activities Climate Change Mitigation Climate Change Adaptation Water Circular Economy Pollution Biodiversity Proportion of enabling activities Proportion of transitional activities Not assessed activities considered non-material Taxonomy aligned activities in previous financial year 2024 Proportion of Taxonomy aligned activities in previous financial year 2024 SEKm % SEKm % % % % % % % % % % SEKm % Turnover 357,263 80 — — — — — — — — — — 8 — — CapEx 54,672 94 15,090 28 28 — — — — — 28 — — 15,109 23 OpEx 8,561 97 173 2 2 — — — — — 2 — — 743 8 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 151 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 152 ===== Proportion of turnover, CapEx and OpEx from products or services associated with Taxonomy-eligible or Taxonomy-aligned economic activities – disclosure covering year 2025 (activity breakdown) Turnover Environmental objective of Taxonomy aligned activities Economic Activities Code Taxonomy eligible KPI (Proportion of Taxon- omy eligible Turnover) Taxonomy aligned KPI (monetary value of Turnover) Taxonomy aligned KPI (Proportion of Taxon- omy aligned Turnover) Climate Change Mitigation Climate Change Adaptation Water Circular Economy Pollution Biodiversity Enabling activity Transitional activity Proportion of Taxonomy aligned in Tax- onomy eligible % SEKm % % % % % % % (E where applicable) (T where applicable) % Manufacture of low carbon technologies for transport CCM 3.3 71 — — — — — — — — E — — Sale of second-hand goods CE 5.4 9 — — — — — — — — — — — Sum of alignment per objective — — — — — — Total Turnover 80 — — — — — — — — — — — CapEx Environmental objective of Taxonomy aligned activities Economic Activities Code Taxonomy eligible KPI (Proportion of Taxon- omy eligible CapEx) Taxonomy aligned KPI (monetary value of CapEx) Taxonomy aligned KPI (Proportion of Taxon- omy aligned CapEx) Climate Change Mitigation Climate Change Adaptation Water Circular Economy Pollution Biodiversity Enabling activity Transitional activity Proportion of Taxonomy aligned in Tax- onomy eligible % SEKm % % % % % % % (E where applicable) (T where applicable) % Manufacture of low carbon technologies for transport CCM 3.3 94 15,090 28 28 — — — — — E — 30 Sum of alignment per objective 28 — — — — — Total CapEx 94 15,090 28 28 — — — — — 28 — 30 OpEx Environmental objective of Taxonomy aligned activities Economic Activities Code Taxonomy eligible KPI (Proportion of Taxon- omy eligible OpEx) Taxonomy aligned KPI (monetary value of OpEx) Taxonomy aligned KPI (Proportion of Taxon- omy aligned OpEx) Climate Change Mitigation Climate Change Adaptation Water Circular Economy Pollution Biodiversity Enabling activity Transitional activity Proportion of Taxonomy aligned in Tax- onomy eligible % SEKm % % % % % % % (E where applicable) (T where applicable) % Manufacture of low carbon technologies for transport CCM 3.3 97 173 2 2 — — — — — E — 2 Sum of alignment per objective 2 — — — — — Total OpEx 97 173 2 2 — — — — — 2 — 2 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 152 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 153 ===== Climate change Identified material impacts, risks and opportunities (IRO) Type of IRO Time horizon Value chain CLIMATE CHANGE ADAPTATION To adapt and to mitigate for future physical risks on assets, related to climate change, investments are necessary and may have a potential financial effect. Risk Climatic events in our own operations and the supply chain can affect and disrupt our business. Risk CLIMATE CHANGE MITIGATION Volvo Cars activities generate emissions both through our own operations and throughout the value chain which negatively contribute to climate change. Actual negative impact There may be a market risk from increases in raw material prices due to higher demand within the sector. Risk Transitional risk connected to regulatory changes will directly and indirectly affect supply chain costs. Risk ENERGY Energy consumption in our operations and value chain activities generates emissions and has a negative impact on the climate. Actual negative impact Volatility in energy price and supply could lead to loss of revenue and challenges in achieving climate ambitions. Risk We both contribute to and are affected by climate change. Our operations and value chain consume energy and generate emissions, while physical and transitional climate change risks threaten business continuity. We combat these combined challenges by driving the transition toward electrification, making our operations more sustainable and operating a more resilient business model.  UPSTREAM    OWN OPERATIONS    DOWNSTREAM  SH ORT-TERM   MID-TERM    LONG-TERM OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION 153 ===== SIDA 154 ===== Transition plan We have adopted a climate transition plan aligned with the goal of limiting global average temperature rise to 1.5°C above pre-indus - trial levels, in accordance with the Paris Agreement. The plan is embedded in our corporate strategy and supports our ambition to become a fully electric car company and reach net zero greenhouse gas emissions across our value chain by 2040. Our Scope 1 and 2 emission reduction target has been validated by the Science Based Targets initiative (SBTi) to meet the require - ments of the 1.5°C pathway. Additionally, our Scope 3 target for the Use of sold products has been validated by SBTi as well-below 2°C aligned. In addition to our SBTi targets, our interim corporate emission reduction ambitions guide us on our journey to reach net zero. Together, these ambitions form the foundation for our climate change mitigation actions and are embedded in our strategic planning. Focus areas driving our decarbonisation journey Our focus areas define how we reduce the emissions of our prod - ucts, in the value chain and across our operations. Our climate tran - sition plan is centred on these three areas. The first focus area, Transform to pure electrification, drives our ambition to become a fully electric car company. This transforma - tion is powered by our investments in fully electric powertrains and supported by our portfolio of plug-in hybrid models that help bridge the transition to a decarbonised portfolio. The second focus area, Minimise emissions from materials, focuses on reducing the environmental impact of the parts we use to build our cars, relating to both the ingoing raw materials and the accompanying processing steps. We are increasing the share of recycled and bio-based content in our cars and working closely with suppliers to source low and near-zero emission materials, such as aluminium ingot smelted using renewable energy. We are also extending our commitment to climate neutral energy beyond our own operations by supporting our value chain in transitioning to renewable energy sources. The third focus area, Minimise operational emissions, targets emissions across our value chain and within our own operations, including the production and transportation of our cars and non-production related activities, such as emissions from our retailer network. To minimise operational emissions, we are imple - menting energy efficiency measures in our facilities, switching to climate neutral energy sources, and driving actions to further reduce waste. Initiatives across these three areas are enabling sustainable oper - ations and transforming our product portfolio. Together, these initi - atives reflect a comprehensive and forward-looking approach to climate change mitigation, ensuring that our climate transition plan is actionable and integrated into ourlong-term business strategy. For a detailed overview of our decarbonisation levers and key actions more information can be found on page 156. Embedding climate action in strategy and financial planning Our climate transition plan is fully embedded in our overall business strategy and financial planning. The plan is part of our transforma - tion toward becoming a fully electric car company and reaching net zero; it’s not a standalone initiative. This alignment is reflected in how we allocate capital, prioritise research and development, and structure our operations. By integrating emissions data into our cost performance steering model, we assess sustainability and economic factors during our product development and sourcing processes. More information about our product sustainability steering can be found on page 158. 60 30 20 10 0 40 50 Minimise emissions from materials Transform to pure electrificationMinimise operational emissions –31% –65–75% ~–90% 2018 2025 2030 2040 Removals t CO2 per car Actuals 2025 vs 2018 Ambition 2030 vs 2018 Net zero 2040 ROADMAP TO NET ZERO OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION 154 ===== SIDA 155 ===== Investments in electrification are central to our long-term finan - cial planning and incorporated in our Green Financing Framework. As part of our EU Taxonomy CapEx plan we aim to align our future fully electric cars with the technical screening criteria outlined in the regulation. Our OpEx and CapEx related to the CapEx plan support our transformation to net zero. Climate-related risks and opportunities are integrated in our enterprise risk management and scenario analyses, ensuring that our financial decisions are consistent with our decarbonisation pathway. The transition plan embedded into our strategic and finan - cial frameworks ensures that climate action is not only aligned with our long-term vision but also supported by the resources and gov - ernance needed to deliver on our ambitions. Locked-in emissions Our transition to electrification will require replacing some assets currently used in production of internal combustion engine (ICE) vehicles with equipment designed for new technologies. This will inevitably generate additional emissions during the transition period. However, the overall impact of updating equipment is limited and will not have a material impact on our journey to net zero. Alignment with EU Paris-aligned Benchmarks Volvo Cars is included in the EU Paris-aligned Benchmarks. Our climate strategy and emissions reduction ambitions are aligned with the principles of the EU Benchmark Regulation, and we continue to monitor our alignment with relevant sustainable finance frame - works. Governance and progress on transition plan implementation Our sustainability strategy, including the embedded climate transi - tion plan, is approved by the company’s Executive Management Team and the Board of Directors. These governing bodies are actively involved in overseeing the development, implementation and progress of the strategy, ensuring that it is fully aligned with our strategic direction and long-term business objectives. Our transition plan is reflected in our product development as we continue to expand our fully electric product offering and invest in future battery technology and low-emission materials. These devel - opments, alongside efforts such as increasing the share of climate - neutral energy in our operations and across the value chain, demon - strate our commitment to delivering on our science-based targets and advancing toward our net zero ambition. A more extensive over - view of our progress can be found on page 160. Assessing the resilience of our strategy in a changing world Our strategy and business model, along with our transformation towards electrification, are informed by and aligned with the Inter - national Energy Agency’s Net Zero Emissions by 2050 (NZE) Sce - nario. At Volvo Cars, we recognise that climate change presents both risks and opportunities that demand a proactive and adaptive business strategy. To withstand and adapt to the evolving climate landscape, we continuosly assess the resilience of our operations and long-term strategy to become a fully electric car company. We regularly conduct climate scenario analyses to evaluate potential impacts on our business. The most recent analysis, com - pleted this year, considered a range of plausible climate trajectories and their implications on our operations, supply chain, regulatory environment and customer preferences. IEA’s guidance for the auto - motive industry was considered when assessing our resilience to transitional risk. Given our highly integrated value chain, the full value chain was considered in the transition risk assessment, while the assessment on physical risks using climate scenarios was car - ried out on our major sites. Factors considered in the climate sce - nario analysis, including time horizon, are described on page 145. Our electrification strategy is central to our resilience, accelerat - ing the global shift towards sustainable mobility and reducing greenhouse gas emissions. By phasing out internal combustion engine cars and investing in electrified models, we are positioning ourselves to thrive in the global transition towards a decarbonised economy. Our plug-in hybrid models are a stepping stone towards a fully electric portfolio, increasing business resilience and reducing our vulnerability when markets transition slower than expected. Investments needed to support our strategy are financed through our Green Financing Framework and all investment decisions take sustainability aspects into account, including climate change and any identified uncertainties. Our assessment of the resilience of our strategy and business model, including our transition toward elec - trification, indicates that we operate in a market undergoing rapid transformation and shifting customer demands. To respond to these conditions, we are offering a balanced portfolio of fully electric and hybrid cars to strengthen resilience and position the company for long-term, profitable growth. Our policies Climate change mitigation Our updated Code of Conduct for Business Partners encourages emission reductions for actors across our value chain. In support of our aim to reach net zero, our suppliers, sub-suppliers and retailers are expected to perform activities to reduce greenhouse gas emis - sions within their own operations and across their wider value chain, for example by establishing greenhouse gas reduction plans and setting science-based targets in line with the Paris Agreement. In addition to the Code of Conduct for Business Partners, our Position on climate action outlines how we address climate change mitigation across our full value chain, with a particular focus on transforming our product portfolio. As the use phase of our prod - ucts represent the largest share of our carbon footprint, electrifica - tion is a key lever for decarbonisation. Our Position on chain of custody models describes our view on using these models to achieve our sustainability ambitions. Today, we accept the use of select chain of custody models and prefer those that use identity preservation, segregation and mass balance on batch level. Our Position on carbon removal demonstrates that we prioritise real emission reductions. Carbon removal or other types of carbon offsetting will not be used to reach our 2025 and 2030 emission reduction ambitions. We do not consider carbon insetting or mass balance as carbon offsetting. However, the use of carbon insetting and mass balance must follow requirements outlined in our Position on chain of custody models. We intend to reach our net zero ambi - tion by using carbon removal only as a last resort to neutralise una - voidable emissions. Our Sustainability Requirements are part of our terms and condi - tions for direct materials suppliers. These suppliers are required to develop company-specific ambitions for greenhouse gas emission reductions, including a science-based CO 2 reduction target. As part of these requirements, suppliers must also set targets and imple - ment actions to improve energy efficiency and transition to climate neutral energy sources, both within their own operations and across their upstream supply chains. We are actively working with our sup - pliers to reduce the carbon footprint of their products, both to address climate impact and to minimise the risk of additional charges as a result of regulatory changes. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION 155 ===== SIDA 156 ===== Energy efficiency and climate neutral energy Improving energy efficiency reduces our dependency on energy supply, making us less vulnerable to shortages and price fluctua - tions, while deploying climate-neutral energy ensures sustainable operations. Our operations are regulated by energy efficiency standards and an Energy Directive, both aligned with the European Commission’s Reference Document on Best Available Techniques for Energy Efficiency. Our Climate Neutral Management Directive outlines requirements for energy use in our own operations, while our Position on Energy Attribute Certificates (EACs) governs the procurement and accounting of energy certificates across diverse markets. Climate change adaptation We continuously assess the physical risks on all our major sites to identify and address potential risks with associated risk owners. We have yet to adopt a formal policy on risks related to climate change adaptation. Our actions We address climate change across our entire value chain, from product development and production to supplier engagement and retail operations. By integrating climate considerations into strate - gic planning, vehicle engineering and operational practices, we are building a more sustainable and resilient business. Our actions underpin our corporate sustainability ambitions by reducing green - house gas emissions and increasing our resilience to climate related risks. Our decarbonisation levers are tools and strategies we deploy to reduce carbon emissions across our value chain, in order to achieve our corporate CO 2 ambitions and align with the 1.5 degree pathway. These levers are embedded in our sustainability strategy and cli - mate transition plan, integrated with our overall business strategy and financial planning. Our actions are outlined within each decar - bonisation lever and structured by our three focus areas: electrifica - tion, reducing emissions from materials, and reducing emissions from our own operations. Transform to pure electrification Electrified car sales The electrification of our fleet is our biggest lever to decarbonise. In 2025, our electrified fleet, made up of fully electric and plug-in hybrid cars, accounted for 46 per cent of total sales. During the year, we expanded our product portfolio with the fully electric ES90 and the XC70, a long-range plug-in hybrid, alongside updated versions of several of our existing electric and plug-in hybrid models. In early 2026, we further strengthened our product offering with the launch of the fully electric EX60, marking a crucial milestone in our electri - fication journey. Vehicle energy efficiency The ES90 features the lowest official aerodynamic drag coefficient in our fleet. Less air resistance results in less energy consumption and a longer driving range. Technological updates have also been introduced through model-year upgrades to further improve the energy efficiency of existing models. For example, the implementa - tion of an 800V (from 400V) propulsion system decreased the weight of the fully electric EX90, increasing energy efficiency, performance and battery range. Electrified car retail sales (k units) 2025 2024 Fully electric cars (BEVs) 152 175 Plug-in hybrid electric cars (PHEVs) 171 178 Electrified car sales total 323 353 Electrified car retail sales (%) 2025 2024 Fully electric cars (BEVs) % of sales 21 23 Plug-in hybrid electric cars (PHEVs) % of sales 24 23 Electrified cars % of sales 46 46 Policy1) Objective Scope Code of Conduct for Business Partners Climate change mitigation Upstream, downstream Position on climate action Climate change mitigation Upstream, downstream Position on sustainable materials Climate change mitigation Own operations, upstream Position on sustainable steel Climate change mitigation Own operations, upstream Position on sustainable plastics Climate change mitigation Own operations, upstream Position on circular economy Climate change mitigation Own operations, upstream Position on chain of custody models Climate change mitigation Own operations, upstream, downstream Position on carbon removal Energy Upstream Position on Energy Attribute Certificates for electricity Energy Upstream Sustainability Requirements Climate change mitigation and energy Downstream Climate neutral management directive Climate neutral and renewable energy deployment Own operations Energy efficiency standard Energy efficiency Own operations Energy directive Energy efficiency Own operations 1) More information regarding Volvo Cars´ position papers can be found on page 142. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION 156 ===== SIDA 157 ===== Regional efficiency metrics 2025 2024 Tailpipe CO2 efficiency Global g CO2/km WLTP 103 96 Tailpipe fuel efficiency EU-27 g CO2/km WLTP 60 58 Tailpipe fuel efficiency China L/100 km WLTP 5.78 6.29 Tailpipe fuel efficiency US mpg EPA 49 45 Electric energy consumption BEV Global Wh/km WLTP 177 172 Electric energy consumption BEV EU-27 Wh/km WLTP 176 172 Electric energy consumption BEV China Wh/km CLTC 163 146 Electric energy consumption BEV US Wh/miles EPA 352 345 Charging with integrated energy systems We know that the electric car is a cornerstone of the future energy ecosystem. That’s why Volvo Cars is contributing to an integrated electric car ecosystem with products designed to enhance the user experience and accelerate the transition to more sustainable and resilient energy systems. Charging at optimal times and exporting energy to the grid during periods of high demand strengthens our energy systems. This bi-directional charging capability is available in select new models, including the EX90 and EX60, and select markets starting 2026. Life Cycle Assessment reports To provide transparency for our customers, employees, investors and other stakeholders, we publish third-party-reviewed Life Cycle Assessments (LCA) for our globally available new fully electric models. This year, we released the LCA report for the ES90. The ES90 is a strong proofpoint of the actions we have taken to reduce the emissions associated with the materials of our cars. The ES90 is built with approximately 30 per cent recycled aluminium, 20 per cent recycled steel as well as 15 per cent recycled polymers and bio-based material. The EX60 LCA report released in early 2026 demonstrates that when using a European energy mix to charge the car, the total lifetime carbon footprint amounts to 23 tonnes. When charged with renewable energy, the footprint is reduced to only 18 tonnes. Minimise emissions from materials Low and near-zero emission primary materials and recycled materials and climate neutral energy across the supply chain Reducing emissions from materials is a critical part of our climate strategy. Steel, aluminium and battery materials are the primary contributors of CO 2 emissions, and together they account for the largest combined share of material content in our cars. We prioritise materials made with renewable energy and recycled content, and we collaborate with our supply chain partners to inte - grate sustainable materials into production. On average, our 2025 fleet consists of 20 per cent recycled materials. Increased use of recycled content in our products drives down the carbon footprint, reduces material waste, and supports a circular economy. Steel We have an agreement with SSAB for the supply of high-quality recycled and near-zero emissions steel in select components in the new EX60 and other cars utilizing our SPA3 architecture. Compared with conventionally produced steel in Europe, SSAB’s recycled steel reduces carbon emissions with more than 70 per cent and is made with a recycled content of almost 100 per cent. Aluminium To directly reduce emissions from aluminium in our value chain, we have worked with our suppliers to ensure that the aluminium in our cars is produced using renewable electricity in the energy-intensive smelting process, significantly reducing the carbon footprint of the finished material compared with the global average. By sourcing low-emission and recycled aluminium, we have reduced over 240,000 tonnes of CO2 in our fleet this year compared with using primary aluminium manufactured using grid electricity. This achieve - ment is a result of the strong collaboration with our supply chain partners, paired with our product sustainability steering process, which empowers cost-efficient, data-driven sustainability decisions across our organisation. Together, we continue to accelerate the use of low-emission and recycled materials in our industry. Battery materials Through our product sustainability steering process, we encourage suppliers to utilise renewable energy and improve their energy effi - ciency, strengthening sustainability across the supply chain. Due to the growing demand for battery materials driven by electrification ambitions, and the emissions intensive production of battery -grade materials, we place strong strategic emphasis on further supporting our battery suppliers in decarbonising their operations. Minimise operational emissions Electrification, fuel switch and climate neutral energy In 2025, we implemented measures to replace fossil fuel consump - tion with climate neutral energy in our own operations. This year, four additional manufacturing plants have reached fully climate neutral energy status. For example, the transition from gas boilers to heatpumps and electrified boilers in our Olofström plant and the transition from fossil-based heating sources to biomethane in Ghent and Chengdu resulted in a reduction of 26,000 tonnes of CO 2 on an annual basis. Through these actions, we are moving closer to our ambition of achieving 100 per cent climate neutral energy in our own operations. Within our non-manufacturing facilities, such as warehouses and office spaces, we have installed electric heat pumps which utilise renewable electricity. Moving forward, we aim to take the final steps needed to achieve fully climate neutral operations by advocating for an increased supply of locally sourced energy, expanding power purchase agreements for climate neutral energy, and continuing to invest in on-site renewable energy. Energy efficiency This year, we have enhanced our energy monitoring systems to iden - tify and perform process improvements to reduce energy consump - tion in our facilities. To further reduce our energy consumption, we will continue to reduce energy use while production is closed, expand heat recovery initiatives where feasible, and pursue addi - tional energy efficiency improvements at our sites. Energy efficiency and renewable electricity at our retailers We continue to collaborate closely with our retail partners to reduce emissions by promoting the use of renewable electricity and sup - porting energy efficiency measures. These efforts are reinforced through targeted trainings and guidelines, as well as best practices shared by our Sustainability Champions in each market and via our global retail sustainability programme. For enhanced data transpar - ency needed to drive action, we plan to enable retail-specific emis - sion measurements and profiles to help inform the priority areas and opportunities for each retailer’s operations. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION 157 ===== SIDA 158 ===== Logistics We aim to further reduce emissions from the transportation and distribution of our products by optimising freight routes, using renewable fuels and streamlining our supply chains. We continue to use biofuel in inbound intercontinental ocean container transports in many of our routes between Europe and China. The biofuel reduces fossil CO 2 emissions by 84 per cent per container, com - pared to conventional bunkering. During 2025, the use of air freight was signficantly reduced, directly contributing to the 25 per cent reduction of CO 2 in transports compared to 2024. Climate adaptation During the year, we assessed physical climate risks relevant to our activities and manufacturing sites. Material risks to Volvo Cars, such as heat stress, flooding, storms, water stress and subsidence, are well managed through reinforced buildings, drainage systems, climate control and water efficiency measures. Residual risks such as precipitation leading to flooding, municipal drainage limits and localised ground sinking are being addressed locally. Local man - agement demonstrates strong awareness of climate hazards, and long-term adaptation projects such as water reuse systems, storm protection and resilient design standards, further strengthen our operational continuity. Through continuous monitoring and man - agement, we can identify and adapt to physical climate risks that might affect our economic activity in the future. Site level action for climate adaptation In 2025, we completed the construction of a protective floodgate in Olofström, Sweden, to protect the city and our operational site from climate related flood risk. We also applied for an environmental permit to deconstruct an old intake channel to the decommissioned hydroelectric power plant at our plant in Olofström to further elimi - nate flood risks due to climate change. Climate adaptation in the supply chain Through our Code of Conduct for Business partners we require business partners to implement and maintain appropriate due diligence processes and systems to identify, prevent, mitigate and monitor environmental risks. This approach helps ensure stronger risk management across the value chain. Capabilities for climate action Product Sustainability steering To accelerate decarbonisation across our value chain, we have implemented a steering process that integrates sustainability factors such as carbon emissions and recycled content as key deci - sion-making factors in design, engineering and sourcing. In doing so, targets on CO 2 emissions and recycled content are set on future car programmes and cascaded down to individual components early in the design process. This ensures that climate impact is considered alongside cost, quality and performance when selecting suppliers and materials. During the year, we scaled up the steering process by expanding it to one of our upcoming car models, embedding emissions data into the quotation phase and supplier evaluations. To substantiate sus - tainability performance, the steering process is supported by a Cost and Sustainability Breakdown, enabling suppliers to report compo - nent-level carbon footprints and allowing us to compare low-carbon alternatives across components and systems. Looking ahead, we plan to expand Product Sustainability steering to all future car pro - grams enabling more consistent and data-driven decarbonisation across the supply chain. Improved data model for calculating emissions from materials As a software-driven company, robust digital and data platforms are core to our operations, strategy and innovation. To enable more precise calculations of carbon emissions, we have improved the data depth of our model. Our data model now connects the detailed material composition of the parts that make up every Volvo car to more precise generic and supplier-specific data, making it possible to attribute and substantiate verified emission reductions of our actions. Built to scale, the enhanced data model can integrate additional environmental impact categories beyond CO 2 and recycled content, such as water scarcity, resource depletion and biodiversity. The strengthened model also captures the actions we are taking to reduce emissions in our cars, further deepening the collaboration with our supply chain partners and directly accelerating the use of low-emission and recycled materials in our industry. This capability empowers cost-efficient, data-driven sustainability decisions across the organisation, helping us achieve our CO 2 reduction ambi- tions on our cars. Internal carbon pricing In 2021, we introduced an internal carbon price to accelerate our carbon footprint reduction. Using cost estimates from the emerging direct air carbon capture (DACC) industry and IPCC’s 2018 guidance on a 2030-aligned carbon price of approximately €135 per tonne of CO2, we set an internal price of SEK 1,000 per tonne of CO 2 starting in 2021. The price point was also high enough to motivate several key initiatives and guide internal prioritisation. The internal carbon pricing is applied throughout our operations, with a primary focus on product-related decisions. The price is applied in different ways based on the type of decision e.g. to right-size budgets or guide decisions. This means we use both a shadow price, an implicit price and a real price across fixed, variable and material costs. Our ambitions Progress on emission reduction ambitions In 2025 we achieved our corporate ambition by reducing our CO 2 footprint per car by 31 per cent compared with our 2018 baseline. Our emission reductions are a result of collaboration across our operations to reduce emissions by decarbonising our manufacturing footprint by switching to climate neutral energy, electrifying our product portfolio and sourcing low-emission materials. To achieve our 2030 ambition of 65-75 per cent CO 2 reduction per car and our 2040 net zero ambition, we must continue to strengthen sustainability across the supply chain, deliver on our electrification ambitions, and localise production. Our 2025 and 2030 emission reduction ambitions are gross ambitions, meaning that we will not use carbon removal to achieve these. In reaching our net zero ambition, we intend to use carbon removal as a last resort to neutralise the final residual emissions that cannot be eliminated due to technical, market or legal reasons. The ambitions are science-based and aligned with limiting global warming to 1.5°C. They rest on assumptions about market develop - ments and our transition to electrification, which we continuously monitor to stay aligned with our long-term ambitions. Dialogues with NGOs and investors have also shaped these ambitions. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION 158 ===== SIDA 159 ===== Gross Scopes 1, 2, 3 and Total GHG emissions Total greenhouse gas emissions amounted to 35 million tonnes of CO2 in 2025, compared with 38 million tonnes in 2024, reflecting changes in car volumes. Our emission reductions are also driven by sourcing low-emission and near zero materials for our vehicles and GREENHOUSE GAS INVENTORY, TONNES CO 2 1) Progress Base year % YoY 2025 2024 2018 Scope 1 GHG emissions Gross Scope 1 GHG emissions –45 32,000 59,000 111,000 Scope 1 GHG emissions from regulated emission trading schemes, % — 5 23 — Scope 2 GHG emissions Gross location-based Scope 2 GHG emissions –7 155,000 167,000 252,000 Gross market-based Scope 2 GHG emissions –71 2,000 6,000 131,000 Significant Scope 3 GHG emissions Total gross indirect (Scope 3) GHG emissions –8 34,645,000 37,468,000 41,629,000  Purchased goods and services –11 9,854,000 11,019,000 9,793,000  Upstream transportation and distribution –25 849,000 1,129,000 947,000  Waste generated in operations –10 2,000 3,000 3,000  Business travel –47 32,000 61,000 100,000  Employee commuting –3 44,000 46,000 70,000  Use of sold products –5 23,184,000 24,387,000 29,583,000  End-of-life treatment of sold products –8 408,000 444,000 385,000  Franchises –29 270,000 379,000 748,000 Total GHG emissions Total GHG emissions (location-based) –8 34,833,000 37,694,000 41,992,000 Total GHG emissions (market-based) –8 34,679,000 37,533,000 41,870,000 1) Our ambitions for milestone years 2025, 2030 and 2040 are described on page 160. DISAGGREGATION OF USE OF SOLD PRODUCTS, TONNES CO 2 Progress Base year % YoY 2025 2024 2018 Use of sold products –5 23,184,000 24,387,000 29,583,000   Production and distribution of fuel and electricity (well-to-tank) –10 8,828,000 9,857,000 5,868,000   Combustion of fuel (tank-to-wheel or tailpipe emissions) –1 14,356,000 14,530,000 23,715,000 GHG intensity per revenue, tonnes CO 2/SEKm 2025 2024 Total GHG emissions (location-based) per revenue 97 103 Total GHG emissions (market-based) per revenue 97 102 electrifying our portfolio, reducing absolute emissions from materi - als and use phase by 11 and 5 per cent year over year respectively. 99.90 per cent of our total emissions are in Scope 3. Our emission reductions within own operations are a result of decarbonising our manufacturing footprint and transitioning to climate neutral energy, cutting our Scope 1 and 2 emissions in half compared to 2024. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION 159 ===== SIDA 160 ===== CLIMATE RELATED AMBITIONS Ambition Progress Strategic focus area Ambition Type Unit Base year 2030 2025 2025 2024 Transform to pure electrification Electrified car sales (BEVs and PHEVs) Intensity Per cent — 90–100% 50–60% 46% 46% Minimise operational emissions Climate neutral energy in own operations Absolute Per cent — — 100% 87% 78% Energy consumption reduction per car in own operations Intensity Per cent per manufactured car 2018 40% — 10% 4% CO2 EMISSION REDUCTION AMBITIONS GHG emission scope coverage (share of baseline) Ambition Progress Strategic focus area Ambition Type Scope 1 Scope 2 Scope 3 External validation Unit Base year Base year (t CO2) 2040 2030 2025 2025 2024 Net Zero ambition Reduce CO 2 emissions across the value chain Absolute 100% 100% Market - based 100% — Per cent 2018 41,870,000 90% — — 17% 10% Reduce CO 2 emissions per car Intensity 100% 100% Market- based 86% — Per cent per car 2018 36,002,000 — 65–75% 30–35% 31% 32%   Transform to pure electrification Reduce tailpipe emissions per car Intensity 0% 0% 57% — Per cent per car 2018 23,715,000 — 85–100% 50% 42% 46%   Minimise emissions from materials Reduce emissions from materials per car Intensity 0% 0% 24% — Per cent per car 2018 9,793,000 — 30% 25% 3% 1%   Minimise operational emissions Reduce operational emissions per car Intensity 100% 100% Market- based 5% — Per cent per car 2018 2,494,000 — 30% 25% 37% 25% Science Based Targets Initiative Reduce absolute Scope 1 and 2 emissions Absolute 100% 100% Market- based 0% Validated by SBTi as 1.5°C aligned Per cent 2019 253,000 — 60% — 87% 74% Reduce Scope 3 emissions from Use of sold products Intensity 0% 0% 71% Validated by SBTi as well below 2°C aligned Per cent per vehicle kilometre 2019 30,743,000 — 52% — 23% 26% Climate related ambitions Climate neutral energy This year, 87 per cent of energy consumed in our operations was climate neutral, an increase of nine percentage points compared to 2024 but falling short of our 100 per cent climate neutral energy ambition. By the end of 2025, 100 per cent of our electricity used in own operations was sourced using climate neutral energy sources. We have accomplished full climate neutral energy status in seven of our nine manufacturing plants. Despite these achievements and actions taken to reduce emissions, some of our sites still rely on fossil -based heating sources, which often depend on regional utili - ties. Additionally, regulatory and policy delays in certain regions have hindered access to renewable energy infrastructure, further compounded by a lack of financially sustainable options to support the transition. We remain committed to our ambition of sourcing 100 per cent climate neutral energy and continue to implement energy reduction measures to reduce total energy use across our own operations. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION 160 ===== SIDA 161 ===== Energy consumption and mix in own operations (MWh) 2025 2024 Fuel consumption from coal and coal products — — Fuel consumption from crude oil and petroleum products 9,000 12,000 Fuel consumption from natural gas 133,000 259,000 Fuel consumption from other fossil sources — — Consumption of purchased or acquired electricity, heat, steam and cooling from fossil sources 145,000 187,000 Total fossil energy consumption 287,000 458,000  Share of fossil sources in total energy consumption, % 24 36 Consumption from nuclear sources 8,000 —  Share of nuclear sources in total energy consumption, % 1 — Fuel consumption from renewable sources 161,000 77,000 Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable sources 753,000 744,000 Consumption of self-generated non-fuel renewable energy 2,000 2,000 Total renewable energy consumption 916,000 823,000  Share of renewable sources in total energy consumption, % 76 64 Total energy consumption 1,211,000 1,281,000 Energy production (MWh) 2025 2024 Non-renewable energy production — — Renewable energy production 3,000 3,000 Contractual instruments Scope 2 2025 2024 Consumption of purchased or aquired electricity from renewable sources, MWh 740,000 — Share of bundled purchased or aquired electricity from renewable sources, % 81 — Share of unbundled purchased or aquired electricity from renewable sources, % 19 — Energy intensity per revenue (MWh/SEKm) 2025 2024 Total energy consumption from activities in high climate impact sectors per revenue 3.4 3.2 Energy consumption and mix Total energy consumption decreased 5 per cent year over year, reflecting changes in car volumes as well as systematic energy effi - ciency improvements impacting both running production and down- time. Energy consumption per car in own operations also decreased and remains 10 per cent lower than our 2018 baseline. We continued our transition to climate neutral energy, doubling our fuel consumption from renewable sources from 2024 levels and cutting natural gas consumption in half by electrifying equipment and switching to biogas. As a result, the share of renewable sources in total energy consumption has increased by 11 percentage points from last year. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION 161 ===== SIDA 162 ===== Definitions and methodology CO2 emissions per car Calculated with the total emissions (t CO 2) from Scope 1, market - based Scope 2, and Scope 3, excluding upstream (well-to-tank) emissions from Use of sold products, divided by the annual pro - duced volumes of Volvo-branded cars. The metric shows progress versus the base year. Tailpipe emissions per car Tailpipe emissions include the subcategory Combustion of fuel within the Scope 3 category Use of sold products. Calculated with total combustion (tank-to-wheel) emissions (t CO 2) from Use of sold products divided by the annual produced volumes of Volvo Cars- branded cars. The metric shows progress versus the base year. Emissions from materials per car Emissions from materials include the Scope 3 category Purchased goods and services. Calculated with the total emissions (t CO 2) from Purchased goods and services divided by the annual produced vol - umes of Volvo-branded cars. The metric shows progress versus the base year. Operational emissions per car Operational emissions include all Scope 1, 2 (market-based), and 3 categories in our greenhouse gas inventory except for the catego - ries Purchased goods and services and Use of sold products. Calcu - lated with the total market-based emissions (t CO 2) from Scopes 1, 2, and applicable scope 3 categories, divided by the annual pro - duced volumes of Volvo-branded cars. The metric shows progress versus the base year. Net zero greenhouse gas emissions Calculated with total market-based emissions (t CO 2) from Scopes 1, 2, and 3. The metric shows progress versus the base year. Absolute Scope 1 and 2 GHG emissions (SBTi) Calculated with total market-based emissions (t CO 2) from Scopes 1 and 2. The metric shows progress versus the base year. Scope 3 emissions from use of sold products (SBTi) Calculated with total emissions from Use of sold products divided by 200,000 lifetime kilometres and by the annual produced volumes of Volvo-branded cars (t CO 2 per vehicle kilometre). The metric shows progress versus the base year. Energy consumption per car in own operations Total energy consumption in own operations divided by annual number of cars manufactured by Volvo Cars. Emissions consolidation approach We follow ESRS in consolidating emissions and apply the financial control approach as well as the operational control where applicable. Activity data Unless otherwise stated, we apply emission factors prepared and verified by internationally recognised agencies on activity data for each respective emission source. Scope 1 and 2 are based on pri - mary activity data. Scope 3 includes estimations and assumptions further explained under each category. Scope 1 emissions These include direct emissions from facilities and cars that we own or lease. Emissions are calculated using primary activity data multi - plied by the emission factor for that specific activity from UK DEFRA 2024. Historical or normalised average data is used in place of miss - ing data, where required. Operating leases are included in Scope 1 and 2 emission data, following the consolidation approach and prin - ciples for financial reporting. Scope 2 emissions Emissions include market-based and location-based methods. The location-based method reflects the average emissions intensity of grids on which energy consumption occurs. The market-based method reflects emissions from the utility company. Contractual instruments, which allow for energy attributes such as GHG emis - sions to be allocated, are accounted for in the market-based approach. Scope 3 category 1 Purchased goods and services Each car’s unique material composition is used with generic emis - sion factors from Ecoinvent v3.11 and supplier-specific emission factors to calculate emissions. Calculating emissions from non-vehicle purchased goods and services is done through a spend-based approach. These emissions comprise approximately two per cent of the emissions in this category. Emissions from materials for spare parts are currently excluded from Purchased goods and services. Scope 3 category 4 Upstream transportation and distribution Emissions are calculated with activity data from inbound materials, outbound finished vehicles, and parts supply logistics. A distance - based method is applied together with emission factors from NTM and supplier-specific emission factors. Biofuel is allocated accord - ing to mass balance within the individual supplier networks. Scope 3 category 5 Waste generated in operations Waste generated in operations is calculated according to activity data for weight, waste type and treatment method. Generic emission fac- tors from UK DEFRA 2024 and supplier- specific emission factors are applied. Transportation to waste treatment facilities is calculated with an assumed distance of 1,500 kilometres. Scope 3 category 6 Business travel Emissions from air travel are calculated using a distance-based method where flight distances are multiplied with emission factors from DEFRA. Emissions from other forms of business travel are calculated using a spend-based approach and market-specific emission factors. Scope 3 category 7 Employee commuting Emissions are calculated based on the average number of full time employees of the period using an emission factor derived based on a Swedish simulation study of 27,000 employees. Scope 3 category 11 Use of sold products Vehicle emissions are estimated over a lifetime driving distance of 200,000 kilometres. Data from the Worldwide Harmonized Light Vehicle Test Procedure (WLTP) is used for vehicles sold in WLTP markets. Vehicle models that are not WLTP certified are matched with the closest certified model, using a rule-based, automated method. Emissions from the production and distribution of electricity used for vehicle charging and fuel used in internal combustion engines are considered upstream emissions, well-to-tank. Scope 3 category 12 End-of-life treatment of sold products Calculated using emission factors from carbon footprint report of the C40 Recharge. Material composition is calculated using the average material composition per propulsion type and globally OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION 162 ===== SIDA 163 ===== manufactured Volvo cars. Future enhancement of internal data models will enable us to assign specific EOL factor per material applied to each car’s unique material composition. Scope 3 category 14 Franchises Include the emissions from our global retailer network, consisting of 2200 outlets. Primary activity data from the majority of our retailers is collected and extrapolated to the rest of the network and importer markets. Generic emission factors from UK DEFRA 2024 and the market-based method is applied for Scope 2 emissions. Omitted emission categories A screening of the Scope 3 categories was conducted using the Greenhouse Gas Protocol Technical Guidance criteria to identify the most relevant Scope 3 activities. The following Scope 3 emission sources are not reported on due to either the emission source being not applicable or not significant to Volvo Cars and/or not prioritised yet due to the lack of data and cost of gathering data: Categories 2, 3, 9, 10, 13, and 15. Emissions have not yet been sufficiently esti - mated for deprioritized Scope 3 categories. Biogenic emissions in Scopes 1 and 2 have been assessed as immaterial and are therefore excluded from this report. Currently, Volvo Cars does not have sufficient data to determine the material - ity of biogenic emissions within our Scope 3 categories. Baseline of GHG reduction ambitions The boundaries of our GHG emission reduction ambitions are con - sistent with the organisational and operational boundaries estab - lished in our greenhouse gas inventory. The base year is considered representative because the number of produced cars is the main driver of GHG emissions, and production volume fluctuated by less than 10 per cent the three years following the baseline year. GHG intensity per revenue Total emissions (tonnes CO 2), divided by total revenue (SEKm), as reported in the consolidated income statement. See Note 2 Revenue in the consolidated statement for information on total revenue. Energy intensity per revenue Volvo Cars is classified as operating in high climate impact sectors, including manufacturing, sale of motor vehicles, sale of spare parts and accessories, as well as maintenance and repair of motor vehi - cles. To calculate this metric, total energy consumption (MWh) is divided with total revenue (MSEK). See Note 2 Revenue in the consolidated statement for information on total revenue. Climate neutral energy in own operations The metric shows the share of climate neutral sources of total energy consumption. Due to the lack of grid and residual mix disag - gregation, all grid-sourced electricity has been categorised as fossil - based unless accounted for by EACs. Energy is defined as climate neutral if the electricity, heating, cooling, and compressed air it consumes causes no net increase in emissions of greenhouse gases. Energy production Energy production is the sum of energy produced by equipment owned by Volvo Cars. Volvo Cars defines self-generated non-fuel renewable energy as energy produced by equipment owned by Volvo Cars and consumed by Volvo Cars. Contractual instruments for climate neutral electricity Energy procurement can be either contractually bundled where the EAC and underlying energy are traded in a single contract or unbun - dled where the EAC and the underlying energy are traded in sepa - rate contracts. Vehicle energy efficiency Calculating BEV energy consumption (EC) involves aggregating vehicle sales data by classification parameters (vehicle type, engine type, driveline type, and model year), then performing a lookup operation to assign certified EC values based on the composite vehicle index and model year identifiers. CO 2 emissions data is sourced from region-specific regulatory authorities in the United States, European Union, and China CO2 CO2, carbon, and carbon dioxide refer to, and are used interchange - ably with, CO 2 equivalent (CO 2 e), unless otherwise stated. In most cases CO2 refers to all greenhouse gases. Greenhouse gases The gases listed in Part 2 of Annex V of Regulation (EU) 2018/1999 of the European Parliament and of the Council. These include Carbon dioxide (CO 2), Methane (CH4), Nitrous Oxide (N 2O), Sulphur hexafluoride (SF6), Nitrogen trifluoride (NF 3), Hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs). OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION 163 ===== SIDA 164 ===== Pollution Our operations and value chain contribute to pollution through mainly air and soil emissions, the use of hazardous substances and microplastic release from tyre wear. These impacts raise environmental and health concerns, prompting us to phase out hazardous substances, enhance emission controls and strengthen sustainability standards across our value chain. Identified material impacts, risks and opportunities (IRO) Type of IRO Time horizon Value chain POLLUTION OF AIR Activities in our own operations and throughout our value chain emit pollutants into the air. Actual negative impact POLLUTION OF SOIL Production of components and parts, as well as use of raw materials, lead to pollution of soil. Actual negative impact SUBSTANCES OF CONCERN AND SUBSTANCES OF VERY HIGH CONCERN The sourcing and use of substances of concern, including substances of very high concern, throughout production and end of life treatment can have negative impacts on the environment and human health. Potential negative impact MICROPLASTICS Microplastics from the tyres released during the use phase have a negative impact on the environment and human health. Actual negative impact  UPSTREAM    OWN OPERATIONS    DOWNSTREAM  SH ORT-TERM   MID-TERM    LONG-TERM OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 164 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 165 ===== Our policies Our Code of Conduct for Business Partners sets clear expectations for pollution prevention on actors in our value chain. Business part - ners are expected to comply with environmental laws and implement environmental management systems that address the risk of impacts caused by pollution. They are expected to minimise pollution of air, soil and water, and to apply science-based approaches to reduce their environmental footprint. In particular, business partners should strive to implement adequate procedures when handling potentially harm - ful chemicals and substances to help ensure that they are managed safely, with due consideration for employees, other stakeholders and the environment. Business partners are also expected to actively work to minimise and phase out the use of harmful chemicals and substances where applicable, and to support Volvo Cars on our jour- ney to eliminate such substances from our products and facilities. To further control and limit the environmental impact of incidents or emergency situations within the value chain, our requirements for suppliers ensure they have established processes for identifying potential emergency scenarios, preventing pollution during such events, and responding effectively to mitigate environmental harm. In our operations, we comply with applicable environmental legis - lation and hold environmental permits for all manufacturing sites. While our policies do not explicitly enumerate pollutants or Sub - stances of Concern, we have internal procedures in place to ensure the safe handling of chemical products, to minimise their use and to substitute hazardous substances with safer alternatives where feasi - ble. We work to identify and mitigate pollution-related impacts and risks of leakage and are prepared to implement corrective actions should a pollution incident occur. We acknowledge the negative environmental impact of micro - plastics generated through tyre abrasion during the use phase of cars in our downstream value chain. While this is a relatively new area of focus, and formal policies are not yet in place, we are actively working to understand and mitigate these emissions. Policy1) Scope Position on Circular economy Own operations, upstream, downstream Position on Sustainable materials Own operations, upstream, downstream Code of Conduct for Business Partners Upstream, downstream 1) More information regarding Volvo Cars´ position papers can be found on page 142. Our actions Minimising pollution We aim to continuously reduce our pollution footprint through a focus on product development, procurement processes and retail operations. By integrating environmental considerations into every stage of our value chain we are building a more responsible and resilient business. In addition to meeting all permit requirements, we are working to reduce pollution and towards our vision to eliminate waste and pol - lution. Two of our sites exceed the emission to air threshold for vola - tile organic compounds (VOC), as defined in Annex II of the E-PRTR Regulation (European Pollutant Release and Transfer Register). VOC emissions are closely linked to production volumes, when produc - tion volumes increase, total VOC emissions tend to rise correspond - ingly, while decreases in production typically lead to lower emis - sions. We monitor VOC emissions from our paint shops and take proactive measures such as the use of low-VOC content paints and enhancement of VOC treatment systems. Emissions to air, tonnes 2025 2024 Volatile organic compounds 490 550 Other recent actions have focused on mapping pollutants according to current regulations to enable centralised tracking and improve visibility across the organisation. Looking ahead, we will further improve the efficiency of our processes for monitoring and docu - mentation, ensuring consistency and compliance throughout opera - tions. These efforts are expected to deliver benefits such as more accurate identification of emission sources and enhanced mitigation planning to reduce environmental impact. To help reduce pollution and promote responsible practices in our downstream value chain, we have provided our global retail network with sustainability toolkits and guidelines focused on areas such as chemical management, waste reduction and water treatment. These resources are designed to support retailers in implementing safer processes, minimising environmental impact and complying with relevant standards, thereby lowering pollution risks. Substituting hazardous substances To address the negative impact that Substances of Concern (SoCs) and Substances of Very High Concern (SVHCs) pose on the environ- ment and human health, we have taken a collaborative approach across our value chain. In alignment with EU REACH and EU Taxon- omy criteria, as well as emerging PFAS regulations, we are working closely with suppliers to phase out hazardous substances from future products and production processes. Our efforts extend to ensuring that such substances are only used when no viable alternatives exist and under strictly controlled conditions. Through these efforts, we aim to minimise negative impact throughout our value chain. Amount of Substances of concern that leave facilities as products by main hazard classes, tonnes 2025 2024 Human health hazard 1,474 — Environmental hazard 36,555 — Human health and environmental hazard 34,892 — Other 81 — Total 73,002 — Amount of Substances of very high concern that leave facilities as products by main hazard classes, tonnes 2025 2024 Human health hazard 31 — Environmental hazard — — Human health and environmental hazard 7,832 — Other 81 — Total 7,943 — Monitoring microplastics We are closely following the development of EURO 7 tyre abrasion limits to guide future strategies and ensure alignment with regula - tory and environmental goals. During the year we have integrated EURO 7 compliance into sourcing processes and initiated research collaborations focused on tyre wear and particle toxicity. In parallel, we are studying the impact of driving behaviour on abrasion and working with suppliers to explore alternative materials that reduce microplastic generation. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 165 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 166 ===== Our ambitions Volvo Cars has not yet established specific targets for pollution, SoCs and SVHCs, or microplastics, due to the complexity of baseline definition and the evolving regulatory landscape. Although specific measurable outcome-oriented targets have not yet been adopted, we actively monitor and collect data to ensure compliance with legal requirements in the areas of pollution and chemical substances. Pollutants are tracked and reported in line with the legal permits for all our main sites. SoC and SVHC in our products are tracked in the global OEM International Material Data System (IMDS), in which the suppliers submit data. The IMDS data is continuously sent in and reviewed against Volvo Cars´ requirements to fulfil legal compliance and data quality. Chemical products for use within our operations are tracked and reported through an internal chemical management tool. Definitions and methodology Pollution of air To calculate the amounts of Volatile Organic Compounds (VOC) emitted to air, we use a mass balance based method that captures relevant flows throughout the paint process and related operations. Emissions are calculated by aggregating the VOCs present in applied products and subtracting the amounts destroyed in abate - ment systems and the portion retained in the final coating. Periodic measurements are carried out at least once per year by an external third party in accordance with the EN 12619 standard. For our European sites monitoring is carried out in accordance with EU BREF Standards. The reported amounts are subject to a one-year time lag due to delay in data availability. Substances of concern and Substances of very high concern Are defined using the latest EU REACH Candidate List and hazard classifications according to Globally Harmonized System of Classifi - cation and Labelling of Chemicals (GHS) and Classification Labelling and Packaging (CLP) along with Global Automotive Declarable Substance List (GADSL). To estimate the amounts of SoCs and SVHCs leaving facilities as products, we use the Bill of Materials (BOM) for the most sold car for each driveline type – BEV, PHEV and ICE – as a reference. Material differences including substances between cars are primarily driven by the driveline, as it introduces the most significant technical varia - tions. The chosen BoMs are matched with the latest material data - sheets to calculate the amount of substances in our fleet. The sub - stances are then grouped into four main hazard classes. With these four main hazard classes, there is no overlap of weight or sub - stances. This is our first year reporting SoCs and SVHCs that leave our facilities as products. As a result, no year-on-year comparison is included. Due to limitations in data availability, we are currently able to report only SoCs and SVHCs leaving our facilities as products. We are monitoring possibilities to include the full scope of SoCs and SVHCs that leave our facilities. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 166 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 167 ===== Water We have an impact on freshwater through water withdrawal and consumption from our operations and value chain. At the same time, as we continue our transition to electrification, growing water dependency due to certain water intensive production process exposes us to supply chain and production risks. These impacts and risks are driving us to strengthen water stewardship and resilience across the value chain. Identified material impacts, risks and opportunities (IRO) Type of IRO Time horizon Value chain WATER Withdrawal and consumption of water contributing to water stress. Actual neg- ative impact Approximate 40 per cent of our directly contracted suppliers for direct material are located in high water risk areas. Risks such as water shortage or flooding could lead to supply chain disruption. Risk  UPSTREAM    OWN OPERATIONS    DOWNSTREAM  SH ORT-TERM   MID-TERM    LONG-TERM OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 167 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 168 ===== Our policies Our Code of Conduct for Business Partners sets clear expectations for actors in our value chain to implement efficient and responsible water management practices. Business partners are expected to set measurable targets for reducing water withdrawal and consumption and for improving water quality, taking into account the nature and location of their operations. These expectations are particularly important for partners operating in or near high water-stress areas. Our position on water management outlines how we aim to reduce our water withdrawal, improve efficiency, increase water reuse and recycle and prevent pollution across our operations and value chain. We recognise that water, pollution, biodiversity and climate change are interconnected challenges that require a coordi - nated response. Policy1) Scope Code of Conduct for Business Partners Upstream, downstream Position on water management Own operations, upstream, downstream Position on sustainable steel Own operations, upstream, downstream Position on sustainable materials Own operations, upstream, downstream Water management directive Own operations 1) More information regarding Volvo Cars´ position papers can be found on page 142. Our actions We aim to advance water stewardship across our value chain, from supplier engagement and operational practices to retail activities. By integrating water risk considerations into our environmental requirements, site-level planning and supplier processes, we are building a more responsible and resilient business. These efforts support our broader sustainability ambitions and contribute to safe - guarding water resources in water-stressed areas. Enhancing water management in our operations During the year we strengthened water management in our own operations by improving process and cooling water monitoring, implementing leakage detection and maintenance and optimising water reuse and recycling. Looking ahead we aim to increase rainwater harvesting, water reuse and recycling and optimise water usage during down-time. We also plan to achieve LEED (Leadership in Energy and Environmental Design) Gold or higher in all large construction projects including those situated in water-stressed areas, leading to improved water efficiency and lowered water withdrawal. The total water consumption in own operations decreased between 2024 and 2025, partly due to our implemented measures and due to lower production volumes. In 2025, 36 per cent of water withdrawal comes from areas of high water stress. Water 2025 2024 Total water withdrawal, m 3 1,800,000 2,024,000 Total water consumption, m 3 707,000 862,000 Total water discharges, m 3 1,093,000 1,162,000 Water withdrawal in areas at water risk 1), m3 656,000 687,000   Share of water withdrawal in areas at water risk1), % 36 34 Water consumption in areas at water risk 1), m3 190,000 225,000   Share of water consumption in areas at water risk1), % 27 26 Water reused and recycled, m 3 283,000 — Water consumption per revenue, m 3/SEKm 2,0 2,2 1) Including areas of high water stress; methodology updated from water stress to water risk areas, change to 2024 result is immaterial. Water treatment Water treatment across our sites is adapted to operational needs and local infrastructure. To manage wastewater responsibly, manu - facturing facilities rely on biological treatment systems, tertiary treatment systems, or a combination of both. At most sites waste - water is discharged to third-party providers for treatment, in line with local regulations. These practices support our commitment to minimising environmental impact and ensuring compliance with legal demands. Advancing water stewardship in the value chain To further ensure compliance with the water-related requirements outlined in our Code of Conduct for Business Partners, we updated our supplier onboarding and follow-up processes. Throughout the year, we collected water use data from supplier sites located in water-stressed areas and gathered their roadmaps and reduction targets for 2025 and 2030. Looking ahead, we will continue gather - ing water-related data, set requirements for reduction targets and evaluate suppliers to advance water stewardship across the supply chain. These actions aim to reduce water use in the supply chain, particularly in regions facing water risks, thus mitigating our identi - fied water-related impact and risks in the supply chain. At the same time, we supported our global retail network by pro - viding sustainability toolkits and guidelines focused on reducing water withdrawal and promoting efficient water use. Through these efforts, we aim to lower water withdrawal per car across our global retail operations, reinforcing our commitment to responsible water management throughout the value chain. Identifying water risks across the value chain During the year we conducted water risk assessments for our directly contracted suppliers for direct material, our own operations sites and our retail partners, enabling us to identify the sites located in water risk and water stressed areas. This has deepened our understanding of water-related vulnerabilities across our value chain, enabling us to take more targeted and effective actions. These efforts are supported by continued data collection, supplier evaluations and requirement setting to promote water stewardship. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 168 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 169 ===== Our ambitions Volvo Cars has set an ambition to reduce freshwater withdrawal per manufactured car in our own operations by 50 per cent by 2030 from a 2018 baseline. The ambition is informed by the scientific understanding of water balance and water cycle, as well as the interconnection between biodiversity and climate, which is based on recognized standards. It is based on recognised standards and defined based on recommendations and discussions with external stakeholders such as NGOs and academic institutions. The ambition supports the reduction of water consumption by improving operational efficiency and increasing internal reuse and recycling. These efforts are especially relevant in water-stressed regions, where we aim to reduce pressure on local freshwater sources. Progress toward the ambition is monitored through internal water reporting systems and reviewed quarterly. As of 2025, we have achieved a 29 per cent reduction in fresh - water withdrawal in our own operations per manufactured car. Definitions and methodology Total water withdrawal Includes sources from third party purchased water, direct self- supply from surface water or groundwater, and harvested rainwater. Today, around 98 per cent of water withdrawn comes from third- party purchased water from the municipality. The amounts are measured using direct methods. Less than one percent is estimated. While harvested rainwater should be included as a source of water withdrawal, the amount remains insignificant in 2025. Total water discharged Refers to water discharged back to water bodies. Approximately 98 per cent is directed to third-party water treatment systems. The majority of discharged water is measured using direct methods while indirect methods are used to estimate remaining sites based on an assumption of water discharge- to -withdrawal ratio. Total water consumption Calculated as “water withdrawal – water discharge = water consumption.” Areas at water risk including water stress The Aqueduct Water Risk Atlas 4.0, developed by the World Resources Institute (WRI), was used to identify sites located in areas exposed to high or very high water risk and/or high or very high water stress. Sites were classified as being in areas of water risk if they received an “Overall Water Risk” score of high (3–4) or extremely high (4–5). Overall water risk includes indicators for water scarcity such as baseline water stress. Similarly, sites were identified as being in areas of high water stress if their “Baseline Water Stress” score was high (3–4) or extremely high (4–5). Total water reused and recycled The majority of water recirculated at manufacturing sites is water from paint shops. Recycling in manufacturing plants is directly measured at the recycling processes. Only two plants are included in the water reused and recycled figure due to data quality con - straints. Zero water circulation is assumed for all other sites to be conservative. At non-manufacturing sites, recirculated water primarily comes from car wash facilities at owned retailers. Estimations use a stand - ardised amount of water recycled per car wash, multiplied by the number of cars washed. Water withdrawal reduction from own operations per manufactured car Defined as a percentage decrease in water withdrawal per car man - ufactured, using 2018 as the baseline year. The metric is calculated by dividing the total water withdrawal (excluding harvested rain - water) by the number of cars manufactured and comparing this ratio to the 2018 baseline. Rainwater harvesting is excluded from total withdrawal figures when calculating the KPI, as it is considered a sustainable practice that reduces reliance on conventional water sources and mitigates urban runoff and flooding risks. Water consumption per revenue Based on total water consumption (m 3), divided by total revenue (MSEK), as reported in the consolidated income statement. See Note 2 Revenue in the consolidated financial statement for informa - tion on total revenue. Water In this chapter water refers to freshwater only ie. groundwater and surface water with a mean salinity of <0,5 per cent. WATER WITHDRAWAL REDUCTION AMBITION Ambition Progress IRO Ambition Type Value chain Base year Base year unit 2030 2025 2025 2024 Withdrawal and consumption of water contributing to water stress To decrease freshwater withdrawal per manufactured car in our own operations Per cent Own operations 2018 3,8 m3/ car 50% — 29% 20% OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 169 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 170 ===== Biodiversity and ecosystems We contribute to biodiversity loss through emissions throughout our value chain, supply chain activities such as raw material extraction that degrade ecosystems and harm species, as well as impacts from operations within our own facilities and the use phase of our products. At the same time, we face risks due to our reliance on ecosystem services – such as water availability and natural hazard regulation – which are increasingly threatened. These impacts and risks motivate us to contribute to a nature-positive ambition and more sustainable sourcing practices to protect long-term operational stability. Identified material impacts, risks and opportunities (IRO) Type of IRO Time horizon Value chain DIRECT IMPACT DRIVERS OF BIODIVERSITY LOSS Raw material extraction and production of components, manufacturing of cars and fuel as well as tailpipe emissions have a negative impact on climate change and pollution which drives biodiversity loss. Actual neg- ative impact IMPACT ON THE STATE OF SPECIES State of species are impacted from activities in our supply chain, from the use phase of our products as well as from our sites in or near Key Biodiversity Areas. Actual neg- ative impact IMPACTS ON THE EXTENT AND CONDITION OF ECOSYSTEMS Impact occurs upstream in activities such as construction of mines for raw material extraction through land degradation and by our sites through environmental disturbances such as light and noise pollution. Actual neg- ative impact IMPACTS AND DEPENDENCIES ON ECOSYSTEM SERVICES Our upstream supply chain has a negative impact and affects the proper functioning of ecosystems. Actual neg- ative impact Our upstream supply chain depends heavily on provisional service such as water availability and regulating services from vegetation that helps stabilize soil and prevent landslides. Risk  UPSTREAM    OWN OPERATIONS    DOWNSTREAM  SH ORT-TERM   MID-TERM    LONG-TERM OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 170 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 171 ===== Our policies We set clear expectations for actors in our value chain through our Code of Conduct for Business Partners. They are expected to assess the character and context of their activities, particularly in or near Key Biodiversity Areas (KBA), and evaluate their potential impact on ecosystems. We require our partners to prioritise actions that avoid and mitigate negative impacts, including those related to climate change, pollution and land use change. They shall not procure or finance raw materials that contribute to deforestation, habitat destruction or deep-sea mining. In addition, we encourage active participation in restoration efforts and the protection of natural ecosystems and endangered species. Business partners are also expected to have a robust risk assess - ment in place before starting operations or engaging in activities where the rights of indigenous people or local communities may be adversely affected, and implement mitigating actions as required. Our position on nature and biodiversity outlines how we aim to reduce our impact on ecosystems and contribute to their regenera - tion. We recognise that biodiversity loss is driven by climate change, pollution, land-use change and unsustainable resource extraction – issues that intersect with our operations and supply chain. We seek to avoid and reduce negative impacts on biodiversity, restore eco - systems and transform our business to support long-term ecologi - cal resilience. This includes integrating biodiversity considerations into our sourcing, product development, and operational decisions. Policy1) Scope Code of conduct for Business Partners Upstream, downstream Position on nature and biodiversity Own operations, upstream, downstream Position on sustainable steel Own operations, upstream, downstream Position on sustainable plastics Own operations, upstream, downstream Position on sustainable materials Own operations, upstream, downstream Position on circular economy Own operations, upstream, downstream 1) More information regarding Volvo Cars´ position papers can be found on page 142. Our actions We aim to contribute to a nature-positive future by reducing our impact across the value chain, from sourcing and manufacturing to operations and product use. By integrating biodiversity considera - tions into our environmental requirements, supplier engagement and site-level planning, we are building a more responsible and resilient business. These efforts support our broader sustainability ambitions and contribute to protecting ecosystems and species. Strengthening biodiversity action through product and material choices During the year, we conducted scenario analyses grounded in our annual biodiversity impact assessment to evaluate how strategic choices, such as shifting product portfolios, advancing electrifica - tion and increasing recycled content, may influence key biodiversity impact drivers. These forward-looking evaluations guide our work towards contribution to a nature-positive future. As tailpipe emissions are a significant driver of biodiversity loss, our transition to electrification is reducing the impact of our prod - ucts during the use phase. This shift directly addresses climate change-related pressures on biodiversity by eliminating greenhouse gas emissions from car use. Another area of focus is our upstream value chain, where the extraction and processing of materials can contribute to climate change, pollution and land degradation. To address these chal - lenges, we are actively strengthening responsible sourcing practices and increasing the recycled content in our products. In 2025, we reached 19 per cent recycled content in our new car models and 20 per cent recycled content across the fleet. Our new EX60, launched in January 2026, is estimated to have at least 27 per cent recycled content. Driving biodiversity measures in operations and sourcing During the year, we implemented site-level actions at some key sites, such as natural value assessments and measures and actions to reduce light pollution in new buildings. We have also implemented biodiversity monitoring and habitat restoration in connection with our newly constructed plant in Košice, Slovakia. In addition, we aim to eventually develop ecosystem and biodiversity action plans and pursue building certifications to further integrate biodiversity considerations into our operations for improved bio diversity plan- ning and site-level impact mitigation. We also broadened the integration of biodiversity considerations across multiple supplier engagement processes to promote sustain - able sourcing and mitigate our dependencies and negative impacts on ecosystems and biodiversity. This includes requiring suppliers to adopt approaches aligned with the Taskforce on Nature-related Financial Disclosures (TNFD) and the Locate, Evaluate, Assess, and Prepare (LEAP) framework where appropriate set measurable targets for pollution and biodiversity and actively contribute to conservation and restoration efforts. Biodiversity requirements for business partners have been strengthened by requesting to appropriately assess their biodiver - sity impact, to not engage in harmful sourcing practices such as deforestation and deep-sea mining, and encouraging restoration efforts and protection of ecosystems and endangered species. Looking ahead, we plan to engage suppliers of specific materials to understand their progress in reducing and preventing negative impacts on biodiversity. Assesing the impacts of our operations We annually assess the risk of our operational activities impacting biodiversity-sensitive areas by identifying which of our sites are located within or near KBA in combination with the type of activity at the site. During 2025, we identified that 31 of our operational sites are situated in or adjacent to such areas. Biodiversity – Land use and ecological sensitivity 2025 2024 Sites in or adjacent to KBA, location of adjacent sites 31 34 Hectares in or adjacent to KBA 1,026 977 Share of hectares in or adjacent to KBA, % 35 34 Estimated impact on biodiversity from Volvo Cars' value chain, species.year 166 177 While we have not yet conducted detailed quantification of our impacts on local habitats or species, we recognise that our presence in or near these areas may contribute to pressures on biodiversity. These could include habitat disturbance, fragmentation or other indirect effects that could lead to the deterioration of natural habi - tats. As such, we are taking steps to better understand these inter - actions and to integrate biodiversity considerations more systemat - ically into our environmental management practices. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 171 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 172 ===== Site location Activity potentially impacting KBA areas Biodiversity-sensitive area potentially impacted Torslanda, Sweden Manufacture of motor vehicles Torslandaviken Gent, Belgium Manufacture of motor vehicles Gentse Kanaalzone Daqing, China Manufacture of motor vehicles Longfeng Wetland Nature Reserve Taizhou, China Manufacture of motor vehicles Taizhou Wan Košice, Slovakia Construction of buildings Košická kotlina Assessing biodiversity risks and value chain impacts During the year, we advanced our work on biodiversity in the supply chain by conducting a biodiversity risk assessment for our directly contracted direct material suppliers, using the WWF Biodiversity Risk Filter to identify sites located in high-risk areas. This has deep - ened our understanding of biodiversity related risks in the upstream value chain, enabling us to take more targeted and effective actions. Further we are using species.year as a metric to describe the bio - diversity impact of our full value chain. The metric consists of twelve different impact categories summarised into the five main catego - ries of climate change, land use, pollution, water use and others. These together give a comprehensive measure of different types of impact on different types of ecosystems. The species.year metric is also used to inform our scenario analy - ses to explore how different strategic choices – such as product portfolio composition, the transition to full electrification and increased use of recycled content – could affect our resilience to biodiversity and ecosystem related risks. These scenarios focus on the most significant impact areas and look ahead to 2040 to capture long-term risks and opportunities. The scenario work has high - lighted the potential of various pathways for us to contribute to a nature- positive future. Stakeholder collaboration We are also one of the funding partners of the Bee-Go MoU where we collaborate with multiple external stakeholders including the City of Gothenburg and University of Gothenburg. Together we have carried out the first collaborative project to promote biodiversity and sustainable areas. Looking forward we will work together on 16 ambitions aligned with the Kunming-Montreal Global Biodiversity Framework. When relevant, we engage with local communities to understand context-specific considerations and to help identify appropriate approaches. In some cases, this has included applying nature -based solutions to mitigate potential impacts on ecosystems and sur - rounding communities. Our ambitions Although specific measurable outcome-oriented ambitions related to biodiversity and ecosystems have not yet been adopted, we have a long-term ambition to be net positive across our value chain and to contribute to a nature-positive future. This ambition guides our stra - tegic approach and the development of actions to mitigate impacts in our value chain and engage in restoration activities. When devel - oping our long-term ambition for biodiversity, we undertook scenario analyses to understand the effect of potential future production and plans on biodiversity and to develop strategies and plans that bal - ance economic stability with impact mitigation measures, aligned with the vision of the Kunming-Montreal Global Biodiversity Frame - work. We track our performance towards contributing to a nature-posi - tive future through yearly assessment of the impact from our full value chain. This has been assessed since 2022 and is analysed per pressure type as well as by different products, materials and by different parts of the value chain. Our work on biodiversity is closely linked with other environmen - tal topics, such as climate change, water management and resource use for which we have clear ambitions. See pages 160, 169 and 176 for more information. Species.year Upstream Own operations Downstream Climate Change Land Use Pollution Water Use Others1) 1) Includes photochemical ozone formation. Species.year  >100    10–99    0.1–9.99    <0.1 Definitions and methodology Species.year Estimated biodiversity impact that indicates relative pressures on biodiversity throughout the value chain. Calculated using the ReCiPe 2016 method to evaluate the lifecycle impact from raw material extraction to end-of-life. Bill of Materials (BoM) and material weights for all cars, including processing and packaging was used for upstream impact. For our operations, a mix of generic data and specific internal data was used focusing on activities estimated to have the highest potential impact. For downstream, data on water usage for car washes, replace - ment parts, and consumables, alongside Life Cycle Assesment (LCA) data for fuel, electricity and end-of-life treatment, were considered. The estimated biodiversity impact indicates relative pressures on biodiversity through the value chain, but is not an exact measure of species loss. Sites and hectares in or adjacent to Key Biodiversity Areas A year-end snapshot of all Volvo Cars owned and leased facilities and land was used. Facilities were grouped into sites based on prox - imity and operational relevance. For leased buildings, the total leased floor area is used to represent the land use even though area over multiple floors is an over-representation. These site locations were compared against KBA using a 5 kilometre threshold to deter - mine adjacency. Results are reported as the number of adjacent sites and total hectares. Net positive The concept generally means to do more good than bad. Our definition is that we will strive towards net positive by engaging in decreasing negative impact from value chain activities as well as engaging in restoration activities. Nature positive framework A global vision framework aimed at halting and reversing nature loss. It focuses on two main areas, restoration of nature and decreasing negative impact. Our definition is that we have contrib - uted to nature positive when the impact from our full value chain is decreasing relative to a baseline. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 172 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 173 ===== Resource use and circular economy Our resource use and waste generation contribute to environmental impacts, particularly through raw material extraction, linear elements of product design and end- of-life outputs. At the same time, we face risks from limited access to sustainable materials and increasing regulatory demands around circularity and recycling. These impacts and risks are accelerating our shift toward circular business models, sustainable sourcing and more efficient resource management across the value chain. Identified material impacts, risks and opportunities (IRO) Type of IRO Time horizon Value chain RESOURCE INFLOWS, INCLUDING RESOURCE USE The negative environmental impact of our resource inflow occurs primarily in connection with extraction of raw materials and their use in our supply chain, before reaching our operations. Actual neg- ative impact Financial risk based on limited availability of sustainable materials on the market due to supply and demand dynamics. Risk RESOURCE INFLOWS AND RESOURCE OUTFLOWS Scaling and expanding circular business models can generate financial opportunities. Opportunity RESOURCE OUTFLOWS RELATED TO PRODUCTS AND SERVICES Business model dependent on volume-driven growth, leading to large amounts of cars placed on the market, which can be associated with negative impacts on environment and society in the product use phase and end-of-life. Potential negative impact Increasing regulatory requirements regarding end-of-life disassembly and recycling are driving a strong integration of circular design principles. Failing to meet these high standards poses a non-compliance risk. Risk WASTE Waste generated throughout the value chain from raw material extraction and processing to production, packaging and end of life has a negative impact on the environment. Actual neg- ative impact  UPSTREAM    OWN OPERATIONS    DOWNSTREAM  SH ORT-TERM   MID-TERM    LONG-TERM OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 173 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 174 ===== VOLVO CARS’ CIRCULAR ECONOMY VALUE CHAIN RETAIL PARTNERS OWN OPERATIONS TIER-1 SUPPLIERS TIER-N SUPPLIERS RAW MATERIAL SUPPLIER MATERIAL RECIRCULATION END OF LIFE TREATMENT USAGE AND MAINTENANCE REMANU F AC TU R I NG REPA IR REUSE Our policies Our Code of Conduct for Business Partners sets expectations on actors in our value chain to adopt circular principles and improve resource efficiency. Business partners are requested to use resources responsibly and actively work to improve resource effi - ciency. In our Sustainability requirements we further require suppli - ers to strive towards maximising recycled content in all materials and components delivered to Volvo Cars. We use our sustainability steering process with our suppliers to assure that all quality and performance requirements are met, while increasing the use of recycled content. The purpose of these efforts is to increase the circularity of our products and minimising environmental impact. Our position on circular economy outlines how we aim to decou - ple financial growth and customer value from resource consumption and environmental impact. We recognise that the extraction and processing of natural resources is a major driver of climate change, biodiversity loss and pollution. By transitioning to a circular busi - ness, we aim to reduce our dependence on primary resources, eliminate waste and generate financial value. Our approach to waste management is guided by the waste hier - archy, prioritising prevention and minimisation over treatment. Our internal Resource Management Directive guides our efforts in this direction. Policies 1) Scope Position on circular economy Own operations, upstream, downstream Position on sustainable materials Own operations, upstream, downstream Position on sustainable steel Own operations, upstream, downstream Position on sustainable plastics Own operations, upstream, downstream Position on responsible sourcing Own operations, Upstream Code of conduct for Business Partners Upstream, Downstream Resource (waste) Management Directive Own operations 1) More information regarding Volvo Cars´ position papers can be found on page 142. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 174 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 175 ===== Our actions We aim to accelerate the transition to a circular economy by reduc - ing resource use, extending material lifecycles and eliminating waste across our value chain. By embedding circular principles into prod - uct design, procurement, operations and retail, we are building a more resource-efficient and resilient business. These efforts support our broader sustainability ambitions and contribute to decoupling growth from resource use and environmental impact. Advancing circularity across materials Circular resource efficiency in operations The use of recycled content in our products is a significant catalyst to reduce our environmental footprint in general, and resource use in particular. This year we signed a new agreement with Swedish steel firm SSAB to supply high-quality recycled steel with near-zero emissions. This directly supports our aim to reduce reliance on virgin materials and minimise the environmental footprint associated with resource extraction. The recycled steel will be used in selected components of the new Volvo EX60 launched in January 2026, as well as other cars based on our next-generation SPA3 car architec - ture. The EX60 is designed with the highest share of recycled con - tent of any Volvo car to date, estimated at a minimum of 27 per cent. Weight reduction and material utilisation degree (MUD) are important enablers of our resource efficiency ambitions, helping to lower the environmental footprint of our cars by reducing raw mate - rial demand, minimising production waste and improving overall material efficiency. We have been able to reduce the weight of selected parts by up to 70 per cent, in one case achieving a six kilo - gram reduction in aluminium. This is made possible through new technology, strengthened collaboration throughout the value chain as well as continuous optimisation of engineering and manufactur - ing technologies. Scrap steel accounts for around 75 per cent of the total waste generated. To capture resource value and increase resource effi - ciency larger stamping cut-outs are separated and flattened for direct sale, enabling the reuse of around 10 kg of steel per car and reducing waste per car in our stamping operations. We have also implemented targeted reuse practices at non- manufacturing operations. These include reusing pallets, filler material and cardboard boxes to enable their use as material resources. At our Swedish sites, we have introduced a reuse strategy for con - struction materials and other assets and established reuse hubs to expand circular activities. Circular principles in supplier and retail practices In our Code of Conduct for Business Partners and Sustainability Requirements, we have strengthened our requirements for business partners to encourage the adoption of circular practices and responsible waste management, while also increasing transparency and quality regarding recycled content. During the year, we have followed up with our suppliers through annual assessments to verify targets and track waste flows, moni - toring the percentage directed to reuse, recycling, landfill and incin - eration. We continue to monitor our suppliers´ waste practices, and to date, 1,039 of our directly contracted supplier sites have set a waste reduction target. This ammounts to 89 per cent of our suppli - ers that have completed our Environmental assesment (EA). Downstream, we supported our global retail network with sustain- ability toolkits and guidelines to improve recycling, material sorting and component value retention. These efforts aim to reduce landfill and incineration while maximising the value of materials in use. Circular business We have a wide range of circular business activities that deliver cost savings and generate revenue for the business, while reducing the need for primary materials. The main streams include remanufactur - ing and repair, waste trading and weight reduction actions. Our battery centres in Asia and South America help maximise battery use through repairing and refurbishing high voltage batter - ies. When our cars require a battery exchange this can easily be replaced with a refurbished one. This circular initiative prolongs the lifespan of our fully electric cars even further, helping to reduce concerns around battery life. This helps create customer value while enhancing value retention and reducing our environmental impact. Looking ahead, we will continue to close material loops, scale circu - lar business models and further embed circularity across our opera - tions and value chain. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 175 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 176 ===== Our ambitions Volvo Cars has defined circularity ambitions that support our broader policy objectives of reducing environmental impact, improving resource efficiency, and enabling a more circular business model. These ambitions are embedded in our sustainability strategy and reflect our commitment to responsible circular economy across the value chain. Recycled content in cars To reduce reliance on primary raw materials and increase circular material flows, we established ambitions for the amount of recycled content in our cars. To define these ambitions, we applied the princi - ples of ISO 14021 and aligned with the objectives of the EU Circular Economy Action Plan, European Battery Regulation and the EU Criti - cal Raw Materials Act (CRMA). Our ambitions are developed based on dialogues with suppliers and material specialists, reflecting both industrial averages and realistic advancements in incorporating recycled materials into components. Key assumptions when devel - oping our ambitions include achieving our fleet electrification goals by 2030. Progress toward our ambitions is monitored and reported internally on a quarterly basis. One of Volvo Cars’ circular economy ambitions entails the utilisa- tion of 25 per cent recycled and biobased content in new car models by 2025. We achieved this ambition with an overall recycled content share of 27 per cent for the EX60 launched in January 2026. We are on track and remain committed to our long-term sustainability ambitions. Waste management in operations We aim for a recirculation rate of more than 99 per cent from our own operations by 2030, limiting incineration and landfill to less than 1 per cent. This ambition supports our goal of minimising envi - ronmental impact from waste. It is based on solid data and a deep understanding of how the different waste streams are generated. Internal stakeholders, along with selected business partners, have been involved in the ambition-setting process to assess the feasibil - ity of roadmap actions. It is supported by improved sorting, analysis of mixed waste and closed-loop systems for production scrap. Performance is tracked and reviewed annually. In 2025, we increased our recirculation rate by one per cent, in line with our expected average improvement of one per cent per year. Circular business value creation In 2018, we set a circular business ambition to increase revenue and cost savings, targeting SEK 1 billion in incremental value by 2025, compared to our 2018 base year. In 2025, our circular business value pools generated approximately SEK 1,535 million in combined reve - nues and cost savings. The circular business ambition was not fully met, primarily due to negative effects from volatile metal prices, lower stamping volumes and business decisions, including the closure of the Volvo on Demand service. Even so, the results provide a solid foundation for future growth in the contribution of circular activities. Our 2025 ambition also strengthened internal processes, refined the method - ology for recognising and tracking circular value, and raised aware - ness of circular principles across the company. As we establish future ambitions, the learnings from the 2025 approach – both its strengths and shortcomings – will inform a more robust, margin- oriented approach with improved integration into our financial systems and clearer traceability across value pools. Resource inflows We rely on a wide range of resource inflows across our operations and upstream value chain. These include materials, water, packaging and physical assets that are essential to car production and busi - ness operations. Materials and critical raw materials More than 85 per cent of our cars´ weight consists of steel, iron, aluminium and plastic materials. In addition, our products rely on components that contain finite and critical raw materials such as lithium, cobalt, nickel, manganese and rare earth elements. While the absolute quantities of these materials are low, their extraction and processing can have significant environmental and social impacts. These are classified as Raw Materials of Concern (RMoC) and are subject to enhanced due diligence in the sourcing process. Packaging Packaging plays a crucial role in our operations, supporting the transport of materials, components and equipment. Due to the scale of our global operations, packaging represents a significant resource inflow. Where viable, we use returnable packaging, which has a lifespan of several years. We also aim to use packaging solu - CIRCULAR ECONOMY AMBITIONS Ambition Progress IRO Ambition Type Value chain Base year Base year unit 2030 2025 2025 2024 Extraction of raw material has a negative impact on the environment Increase the percentage of recycled material on a fleet level Per cent Own operations — 30% fleet level — 20% 20% Increase the percentage of recycled material in new car models Per cent Own operations — 35% new models 25% new models 19% 18% Waste generated throughout our value chain has a negative environmental impact We aim for a recirculation rate of more than 99 per cent from our own operations by 2030 Per cent Own operations, downstream — 99% recirculation rate — 95% 94% Scaling and expanding circular business models can generate financial opportunities Generate an additional one billion SEK through adoption and expansion of circular business initiatives Absolute Own operations, Downstream 2018 1,385 million SEK — +1 billion SEK +149 m SEK +266 m SEK OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 176 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 177 ===== tions that minimise material consumption. Our returnable packaging pool amounts to a total weight of 58,726 tonnes, designed for repeated use over several years. Additionally, the amount of standard expendable packaging and spare part packaging used during 2025 was 55,286 tonnes. Both the standard expendable packaging and the packaging used in our returnable packaging pool are 100 per cent recyclable. Property, plant and equipment We are currently expanding our manufacturing network with the construction of a new factory in Košice, Slovakia, while simultane - ously ramping up megacasting capabilities. These initiatives require substantial resource inflows and outflows, which temporarily increase our direct environmental footprint. However, these invest - ments are critical to enabling future efficiencies and electrification ambitions, supporting our long-term decarbonisation and circular economy ambitions. Resource inflows, tonnes 2025 2024 Total weight of products and technical and biological materials used 1,352,125 1,465,284 Weight of secondary materials 267,665 288, 659  Share of secondary materials, % 20 20 Resource outflows Our main resource outflows include the cars we manufacture and place on the market, spare parts, packaging materials used for logis - tics and aftersales and production waste. We apply circular design principles to extend product lifecycles, facilitate reuse and repair and minimise waste. Design and engineering for circularity Circularity is embedded in our product development process. At the R&D stage, we set requirements for durability, repairability, disas - sembly and recycled content. We apply design-for-circularity and engineering-for-sustainability principles, including material selec - tion with recycled or renewable content, reduced part complexity and lifecycle-based performance criteria. Durability and lifecycle extension Our cars are designed for long-term use and multiple ownership cycles. We support this through extended warranty services, availa - bility of spare parts for at least 15 years after production, and initia - tives to reuse tools and components within our operations. The commonly assumed lifetime driving distance of 200,000 km and 15 years is often used in passenger car Life Cycle Analysis (LCA) stud - ies as a basis for product durability and comparability assumptions. However, official data of scrapped cars in the Swedish market shows that our products typically last an average of 20 years in Sweden. Repairability When reparations are needed, our products are made to be easily disassembled, repaired or replaced, with the help of clear repair instructions at our service facilities. By offering customer-focused service and a wide range of spare parts, we strive to make it easy for our customers to extend the lifetime of our cars, thereby increasing resource efficiency. There is currently no industry standard or index that can be used for comparing Volvo Cars´ product repairability performance to other car makers. Remanufacturing and reuse Our aftersales organisation aims to keep components in circulation by remanufacturing or reusing them. We are investing in regional battery remanufacturing centres and developing capabilities to repair and refurbish high-value components. These efforts help retain material value and reduce the need for primary material inputs. Component value retention 2025 2024 Total material saved due to remanufacturing (weight of parts), tonnes 316 360 CO2 saved from reuse of aluminium, steel and copper, tonnes 2,731 2,947 Number of remanufactured parts 31,401 22,227 Number of refurbished batteries 1) 1,788 1,133 Parts and components being recycled, tonnes 1,499 1,256 1) Battery number in this report refers to complete high voltage battery pack (one per vehicle). Recyclability and end-of-life compliance All Volvo cars are designed according to the same principles: to achieve at least 95 per cent recoverability and 85 per cent recycla - bility, something that is verified when sold on EU markets. Ensuring end-of-life recyclability is vital to retaining the value of materials, and we support this through design for disassembly and material selection. In parallel, we implement closed-loop systems for production scrap, such as aluminium and steel, to reduce waste and retain material value during manufacturing. Circular business models We have several functioning business models within the company including product life cycle extension services, closing material loops with material suppliers and used car refresh and sales. We are also exploring new circular value creation opportunities, including energy services, as well as leveraging car data to support safer and more efficient mobility. These business models help decouple resource use from revenue generation. Waste Our main waste streams consist of metals, primarily steel and alu - minium. Non-hazardous waste consists largely of packaging materi - als such as plastics, cardboard and wood, as well as non-hazardous sludge from paint shops. Hazardous waste includes sludge from paint shops, solvents, oils and other chemical residues. To better understand and reduce the volume of mixed waste that cannot be recycled, we conduct sample analyses of mixed waste fractions. These efforts support improved sorting, higher recycling rates and the reduction of landfill waste. Material breakdown in fleet, kilo tonnes 2025 2024 Steel and iron 697 757 Aluminium 213 227 Battery materials 1) 42 46 Plastic materials 276 298 Copper 32 35 Fluids 16 17 Glass 38 42 Natural materials 3 4 Other metals 21 23 Other materials 15 17 Total 1,352 1,465 1) Includes anode and cathode active materials. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 177 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 178 ===== Waste, tonnes 2025 2024 Hazardous waste 8,981 11,846  Directed to recycling 5,040 5,767   Directed to disposal by incineration with energy recovery 2,605 2,965   Directed to disposal by incineration without energy recovery 718 1,599   Directed to disposal by landfill 618 1,515 Non-hazardous waste 132,438 210,209   Directed to recycling 120,551 197,263   Directed to disposal by incineration with energy recovery 9,253 10,993   Directed to disposal by incineration without energy recovery 272 632   Directed to disposal by landfill 2,361 1,321 Total waste generated (excluding reuse) 141,419 222,061  whereof metal 80,325 148,308 Non recycled waste 15,827 19,025 Non recycled waste, % 11 9 Recirculation rate, % 95 94 Definitions and methodology Recycled material ambition Our 2025 and 2030 ambition in fleet and new models can be reached using a combination of bio-based materials (based on the mass balance approach) and physically and/or chemically recycled materials. Fleet refers to the annual produced volumes of Volvo- branded cars. Total weight of products and technical and biological materials Calculation is based on the Bill of Materials (BOM) for every Volvo Cars-branded cars produced during the reporting period. The total weight of the car is calculated by summing the weight of all parts in the BOM. Material composition of each part is determined using the International Material Data System (IMDS). Due to current limitation of data availability, production waste, packaging, and spare parts are not included in the calculation. Weight of secondary materials The proportion of recycled materials is based on global average recycled content as well as data reported by suppliers. The global average recycled content values per material category are taken from established industry-accepted environmental databases. If no generic recycled content information is available for a material, a recycled content of zero is assumed. Waste Waste includes the total volumes sent for recycling, incineration, and landfill as a result of our own operations. The reported volumes reflect the measured amounts sent to each waste -handling route. Reused waste is not considered waste in the reporting in accord - ance with legislation. Non-recycled waste The total volume of incineration and landfilling in relation to total waste. Incineration includes processes both with and without energy recovery. Recirculation rate The indicator reflects the proportion of waste that are redirected to reuse, recycling or by-products relative to the total operational out - put (excluding products). The numerator comprises reuse, by-prod- ucts, and recycling derived from waste streams. The denominator represents all waste streams, together with reuse and by-products. Circular revenue and cost savings ambition Our circular business ambition anchors our definition of the circular economy as an economic system that decouples resource use from financial performance. To ensure progress toward this decoupled system, we apply the 9R framework and refer to ISO 59004:2024 in shaping our approach. We also maintain an ongoing dialogue about our ambitions with NGOs such as the Ellen MacArthur Foundation. Revenue and, where possible, cost savings are derived from our financial systems. In some cases cost savings are linked to decisions that reduce costs but are not included in the financial systems. CO2 savings from remanufacturing The metric represent the avoided emissions achieved when restor - ing used parts instead of producing new ones. The calculation is based on all remanufactured articles received during the year and the measured share of material reused for each functional group in our reman process. The difference between emissions for producing a new part and those for remanufacturing adjusted for actual reuse levels constitutes the CO 2 saving. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 178 VOLVO CAR GROUP  / SUSTAINABILITY / ENVIRONMENTAL INFORMATION ===== SIDA 179 ===== Social information Own workforce PAGE 180–188 Workers in the value chain PAGE 189–194 Consumers and end-users PAGE 195–198 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 179 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 180 ===== Own workforce We create an impact on our workforce – employees and non-employees – by upholding fair labour practices, ensuring safe working conditions, and maintaining a strong commitment to health and safety. Anchored in our strategic framework and guided by our culture and leadership principles, we develop our people, foster a growth mindset, and build a high-performance culture. Identified material impacts, risks and opportunities (IRO) Type of IRO Time horizon Value chain WORKING CONDITIONS Health and safety Workplace health and safety risks can impact workers leading to injuries, illnesses and increased sick leave. Potential negative impact Work-life balance By offering employees paid parental leave globally, gender gaps can be narrowed and parents are supported to balance the demands of work and family. Potential positive impact Adequate wage By paying living or above living wage in all countries, likelihood for respect for labour rights and decent work are strengthened. Actual positive impact Social dialogue, freedom of association, collective bargaining Operating in countries where restrictions on freedom of association and collective bargaining are restrained or do not exist, can impact workers by limiting their ability to negotiate for better working conditions. Potential negative impact Working time Undergoing significant transformation in a rapidly changing industry which may create uncertainty in employees’ working time. Potential negative impact Secure employment Collectively negotiated insurance, regulated working conditions, wages, and benefits provide our employees with security. Actual positive impact Identified material impacts, risks and opportunities (IRO) Type of IRO Time horizon Value chain EQUAL TREATMENT AND OPPORTUNITIES FOR ALL Gender equality and equal pay for work of equal value There is a potential negative impact of not providing equal pay for equal work, with certain regions facing heightened risks of inequality and discrimination in the workplace. Potential negative impact Training and skills development Volvo Cars may provide a positive impact by supporting employees develop new skills and stay relevant in times of rapid technological shifts. Potential positive impact Measures against violence and harassment in the workplace Violence and harassment in the workplace negatively impact employees’ well-being and damage corporate culture. Potential negative impact Diversity By building an inclusive workplace that embraces diverse talents and backgrounds, we create an environment where equal opportunities can thrive. Actual positive impact OTHER WORK-RELATED RIGHTS Child labour Child labour within our workforce would have severe negative consequences, with potential risk in regions employing young workers. Potential negative impact Forced labour Forced labour within our workforce would have severe negative conse - quences, with potential risks in regions where regulatory enforcement is weak. Potential negative impact Privacy Potential negative impact on workforce privacy, if a data breach takes place, particularly given the potential risks associated with using large volumes of employee personal data. Potential negative impact  UPSTREAM    OWN OPERATIONS    DOWNSTREAM  SH ORT-TERM   MID-TERM    LONG-TERM OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 180 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 181 ===== Our workforce Volvo Cars is a global premium car maker headquartered in Gothen - burg, Sweden. With approximately 45,000 employees worldwide, we maintain a strong international presence while remaining deeply rooted in our Swedish heritage. The Gothenburg headquarter houses core functions such as product development, marketing and administration. Our major production facilities are in Gothenburg (Sweden) and Ghent (Belgium), as well as in Charleston (US), Chengdu, Daqing and Taizhou (China). Our research and design cen - tres are located in Gothenburg and Shanghai. Our employees span a wide range of disciplines, including automotive production, software and electrical engineering, battery technology, information technol - ogy and design. This diverse expertise supports our continued evo - lution in a rapidly changing industry. Our transformation towards electrification creates both negative and positive impact for our workforce. Electrification, regionalisation and new ways of doing business demand an organisation and workforce that is flexible, adaptable and continuously improving. Engagement with employees is essential to understanding our impacts and dependencies, and the insights gained inform our strategy and guide our strategic direction. We operate in regions where there is a structural risk of labour rights violations, such as child or forced labour. In these contexts, the impact is not limited to isolated incidents but is a consequence of societal conditions. Even though we do not consider any own operations at significant risk of such incidents, we have identified this as a potential impact also for our own operations. More infor - mation about high-risk countries can be found on page 144. Employing people in many different regions with different exper - tise and competencies can also impact the employees in various ways, e.g. related to gender equality and diversity. Some impacts are more directly related to individual incidents, such as accidents in the production operations. The way we operate, and where we do it, also creates positive impact for our workforce. Our commitment to parental leave for all and paying adequate wages in all our regions generate work-life balance and a possibility for people to improve their lives. We are dedicated to creating learning opportunities for up- and reskilling, and, when needed, hire the competence required for our business transformation towards electrification. Own workforce characteristics The total employee headcount for 2025 remained largely unchanged to the previous year, totalling 44,605 employees com - pared to 44,413 the previous year. However, this stability reflects two offsetting factors. In 2025, the reporting scope was expanded to include a broader scope of subsidiaries that had not been included previously, and in 2024 these entities comprised approxi - mately 3,000 employees and 550 non-employees. The comparative figures for 2024 have not been adjusted. More information can be found on page 207. Conversely, this year’s headcount decreased due to a redundancy process initiated to simplify our organisational structure by reducing layers and limiting the number of managerial roles. The redundancy process was announced in April 2025 and completed by 1 November the same year. In total, the global redun - dancies amounted to reduction of approximately 3,000 positions, including 2,000 positions in Sweden – of which around 1,000 were non-employees – and 1,000 positions in the rest of the world. Con - sequently, the employee turnover for total employees in 2025 rose from 16 per cent to 20 per cent, primarily as a result of the initiated redundancy process. Own workforce 2025 2024 Total employees 44,605 44,413 Blue collar 24,458 24,574 White collar 20,147 19,839 Non-employees 4,899 5,752 Total own workforce 49,504 50,165 Number of employees per country 2025 2024 Sweden 24,245 22,848 China 6,654 8,601 Belgium 6,684 6,370 Other countries 7,022 6,594 Total employees 44,605 44,413 Employee turnover 2025 2024 Permanent employees Employees who left the company 6,016 4,636 Turnover rate, % 14 11 Total employees Employees who left the company 9,477 7,144 Turnover rate, % 20 16 Women Men Total Number of employees by contract type and gender 2025 2024 2025 2024 2025 2024 Permanent employees 10,736 11,081 30,228 30,738 40,964 41,819 Temporary employees 740 815 2,901 1,779 3,641 2,594 Non-guaranteed hours employees 0 0 0 0 0 0 Total employees 11,476 11,896 33,129 32,517 44,605 44,413 Full-time employees 10,116 10,504 30,354 30,225 40,470 40,729 Part-time employees 1,360 1,392 2,775 2,292 4,135 3,684 Total employees 11,476 11,896 33,129 32,517 44,605 44,413 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 181 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 182 ===== Our policies Human Rights Statement Volvo Cars is committed to compliance with internationally recog - nised human rights standards and guidelines. We have incorporated safeguarding human rights into our Code of Conduct including the People Policy, Code of Conduct for Business Partners and the Sus - tainability Strategy. Our work with safeguarding human rights is described in our Human Rights Statement. More information can be found on page 143. People Policy The purpose of our People Policy is to provide an overview of our company commitment connected to human rights: non-discrimina - tion, no child labour, no forced labour, freedom of association, health and safety, remuneration and working hours. The People Policy covers all employees, whether working full- time or part-time, under a permanent contract or on a temporary basis, as well as consultants and agency personnel who work at our premises under the direction of Volvo Cars. Our People Policy is accessible to all employees and on-site contractors via the com - pany intranet in multiple languages and forms part of the annual Code of Conduct training. All employees are required to confirm they have read and understood it. Our policies related to working conditions The People Policy covers the working conditions of our workforce. We strive to eliminate work-related injuries and fatalities among our employees and contractors. In addition to the People Policy, health and safety is guided by the Health & Safety management system and the Work Environment Directive, including items such as moni - toring programmes for preventative actions, provisions of occupa - tional health services and taking research and new technologies into consideration for future work. The working conditions and terms of employment are designed to facilitate, as far as possible, a sound work-life balance. The Family Bond by Volvo Cars further defines our commitment to being a responsible and parent-friendly employer by offering the possibility to take parental leave, without concerns about family support, career disadvantages or any other form of discrimination. We are committed to providing employees with working condi - tions and working hours that comply with statutory requirements. In countries where weekly rest is not regulated by local legislation, internal guidelines are available on the global intranet to ensure compliance. As an employer, we have the responsibility for respecting workers’ rights to freedom of collective bargaining, social dialogue and free- dom of association. The Responsible Employer Directive sets out the principles to meet or exceed requirements in labour law legislation and collective labour agreements in every location where we operate. We have social protection policies that safeguard our employees. Our Pension and Insurance Principles state that all employees shall have insurance benefits covering long-term disability and sickness, occupational injury, death in service and business travel, and have the right to old-age pension benefits that are competitive in the market and country of residence. This includes state and occupa - tional pensions, either defined benefit or defined contribution plans. We are committed to offering fair compensation and benefits packages, based on transparent and objective criteria that are glob - ally aligned. In line with our People Policy, salaries shall always be equal to or above defined living wage. The Remunerations Directive includes our guiding principles for our reward and remuneration pro - grammes. Our policies related to equal treatment and opportunities for all Our Diversity and Inclusion Directive and Discrimination and Harassment Directive set out our principles for equal treatment and opportunities for all. This reflects our commitment to having a diverse and inclusive workplace and our zero tolerance of discrimi - nation, harassment and bullying, including threats and physical abuse. At Volvo Cars, we ensure all employees have equal opportunities for learning based on competence, in line with our People Policy. Our goal is to enable learning through relevant, impactful and adaptive learning experiences that empower everyone at Volvo Cars to drive their own development and adapt to a continuous changing environ - ment. Our Learning Strategy secures critical skills, provides relevant learning journeys and upholds global standards, while our manda - tory learning guideline safeguards compliance, safety and security. Our policies related to other work-related rights We respect and work in line with internationally proclaimed stand - ards of human rights. Our People Policy is based on international human rights standards such as the UN Guiding Principles on Busi - ness and Human Rights, ILO Declaration on Fundamental Principles and Rights at Work, the OECD Guidelines for Multinational Enter - prises on Responsible Business Conduct and UN Global Compact’s Ten Principles. It is explicitly addressed in the People Policy that neither child labour nor forced labour is accepted. We do not tolerate any form of child or forced labour, including debt bondage, trafficking and other forms of modern slavery. Employees shall never be required to deposit identity papers at the start of employment and are free to leave the employment after a notice period, as required by law and contract. Employee engagement We encourage open and transparent discussions where employees feel comfortable expressing their views without fear of retaliation. We actively engage with our workforce and employee representa - tives through employee surveys, union relations, and work environ - ment committees. In line with our commitment to a Speak Up culture in the Internal Reporting Policy, we have established communication channels to ensure employees can raise concerns safely and confi - dentially. Employee surveys The engagement survey forms a key component of our People Lis - tening Strategy. The strategy is overseen by the People Experience function, which is also responsible for ensuring the timely launch and coordination of the engagement surveys. We conduct one to two engagement surveys per year. The surveys are designed to measure both satisfaction and engagement levels across the organisation. Survey results are analysed at the company -wide, organisational, and team levels. This process pro - vides valuable insights that support the development of a motivated and engaged workforce, which in turn drives improved business out - comes. The insights gained are utilised to facilitate meaningful dis - cussions, enhance clarity and inform targeted actions that strengthen efficiency and effectiveness among people leaders and across the business. This structured approach to employee engagement is closely aligned with our culture and values. By fostering higher levels of engagement, we aim to enhance overall performance and maintain our position as an attractive employer within the industry. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 182 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 183 ===== In 2025, our engagement survey achieved a response rate of 81 per cent, surpassing the engagement survey platform benchmark of 75 per cent. The engagement survey platform benchmark figure refers to a global average result, across companies in all industries. The overall engagement index reached 75, exceeding the bench - mark of 74, though below by one point compared with our ambition of being two points above the benchmark. As part of our commitment to diversity, equity and inclusion, the survey also incorporates an inclusion index, derived from the ques - tions ‘speak my mind’ and ‘respectful treatment’. The inclusion index helps to identify gaps and gain insights where employees may not feel safe or valued and where appropriate action plans need to be addressed. Union relations As an employer in more than 35 countries, we engage with a wide range of unions. We have a dialogue with union representatives through our Volvo Cars European Dialogue Forum, the equivalent to a European Works Council. In addition, we have union representa - tives in Volvo Cars’ Board of Directors. Where no collective agreements are in place, we maintain close dialogue with employee representatives on health and safety and other employment topics. To ensure employee involvement, our merit review process includes dialogues with employees in personal meetings. Within our policy on freedom of association, collective bargaining and social dialogue, we safeguard the right to join a trade union, or not, without fear of prejudicial treatment. Grievance channels We encourage a Speak Up culture that allows everyone to ask ques - tions and raise concerns without fear of retaliation. Employees who notice conduct that may result in a violation of the Code of Conduct are expected and encouraged to report issues in our whistleblowing channel, Tell Us, which is available to the entire workforce and is part of the annual Code of Conduct training. Awareness and trust of processes for raising concerns is measured both through the engagement surveys, which assess factors such as ‘ethics’ and ‘speak my mind’, and through specific surveys gathering feedback on employee trust in the whistleblowing channel. Actions taken to provide or enable remedy for actual material impacts on our work - force are managed as part of our remediation process. More infor - mation on reporting channels and remediation for our workforce can be found on page 202. Our actions Our actions related to working conditions Safety and well-being Health and safety is, and has always been, a core priority for Volvo Cars. It is a continuous effort that demands daily attention and commitment. Our global Health & Safety team, with representatives at our major production sites, is responsible for driving our actions within health and safety. We use our Health & Safety management system to describe safe ways of working for all health and safety related topics such as working at heights, occupational medical health checks, risk assessments, work environment inspections, lift - ing and rigging. It is systematically reviewed to share best practices and adapt to new technologies and legislative change. Safety and well-being is monitored and regularly followed up through our man - agement system routines. We offer a wide range of health and safety trainings to our employees and supervised contractors, customised to their specific roles and legal requirements to make our workplace safer. All our on-site contractors are required to undergo a mandatory safety training programme before entering our premises. Our Health & Safety teams support managers and the organisa - tion across all regions, while global process owners ensure a strate - gic approach in areas such as machine safety, electrified vehicle safety, chemical safety, ergonomics, incident and accident manage - ment, personal protective equipment, and legal compliance. Occupational health services maintain compliance with local leg - islation on various factors, including work-related medical checks and employee advice. The main focus is on proactive health initia - tives for our workforce. Employees coverage by occupational Health and Safety management system 1) 2025 2024 Employees, % 100 100 Non-employees, % 100 100 1) Percentage of employees covered by an externally certified occupational Health and Safety management system 15 (19) per cent. China is covered to 100 per cent, no other regions are certified. Proactive risk and incident management Before changes to the work environment are made, risk assess - ments are conducted to evaluate the impact on our workforce and to take necessary preventive safety and well-being measures. All workplaces within our manufacturing facilities are risk assessed and updated when changes are made to the process. The assessment is posted at each workstation. Our global incident reporting system is used to analyse data, respond to reported risks and work environ - ment related incidents and support risk assessments for organisa - tional and physical changes in daily operations. All identified risks are systematically reported, with up to 98,000 incidents recorded annually. The goal is to proactively address and close each risk as promptly as possible. Risks are continuously resolved as they are identified, and typically, approximately 93 per cent of the risks reported in the previous month are closed within the first week of the following month. On a daily basis, manufactur - ing management meets to review health and safety incidents from the previous day and determine whether any corrective or preven - tive actions are required. In the event of a significant health and safety incident, a safety alert is issued within 48 hours. Safety alerts and best practice sharing are issued throughout the company to raise awareness about specific risks and initiate mitigation measures. As a result of proactive and systematic safety efforts, our injury rate (Lost Time Case Rate, LTCR based on 200,000 hours) in 2025 was 0.06. This represented one of our lowest results ever since we started measuring, ranking us among the best in the industry. For 2030, we have set an ambition to achieve an injury rate of no more than 0.02. This ambition reflects our commitment to creating a safe working environment for all our people. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 183 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 184 ===== Health and safety metrics 2025 2024 Work-related fatalities Employees 0 — Non-employees 0 — Work-related injuries Employees 24 — Non-employees 1 — Rate of work-related injuries Employees 0.28 — Non-employees 0.22 — Injury rate - Lost Time Case Rate (LTCR) Employees 0.06 0.05 Recordable work-related injuries Employees 319 — Non-employees 76 — Rate of recordable work-related injuries Employees 3.73 — Non-employees 16.77 — Number of days lost Employees 1,547 — Well-being and health promotion Our Health & Safety management programme focuses on enhancing physical, mental and social well-being. We take a proactive approach to employee well-being by implementing initiatives that address physical, mental, and social health needs. We actively promote preventive care, provide access to well-being initiatives, and create a supportive work environment that empowers employees to thrive. Examples of initiatives based on our Well-being Strategy: • Mental Well-being tool – identifies employees’ risk of burnout and offers support before they become ill • Health Talk tool – supports managers to promote health, prevent ill-health among employees by facilitating the dialogue about their work life situation and general health • Global Heart Health Awareness campaign – blood pressure moni - toring, online CPR courses and global health walk ‘one lap around the globe‘ • World Mental Health Day – activities to raise awareness around mental health Work-life balance We support parents to balance the demands of work and family by promoting gender equality and facilitating career advancement for all our employees. Our Family Bond Policy offers all permanent employees 24 weeks of parental leave at 80 per cent of their base salary. This applies to all genders and covers adoptive, foster, and surrogate care, including non-birth parents in same-sex relation - ships. Family-related leave 2025 2024 Employees entitled to family-related leave, in % 100 100 Women 100 100 Men 100 100 Entitled employees that took family-related leave, in % 14 14 Women 17 17 Men 13 13 Working time We manage working time in line with collective agreements, national legislation and international labour standards, ensuring compliance with ILO conventions and EU requirements. Our approach focuses on preventing excessive overtime and promoting work-life balance. Through our labour law trainings for managers and follow up in Peo - ple Policy Assessments, we secure adequate rest periods and leave. Our systems for time measurement, combined with a high rate of collective agreements and initiatives supporting employee well-be - ing and work-life balance, ensure compliance. Working hours and related indicators are monitored and reported to ensure transpar - ency and continuous improvement. Collective bargaining, social dialogue and freedom of association Our Labour Affairs team works to enforce labour laws and to pro - mote fair and safe working conditions. To facilitate the procedures for information and consultation with our European employees, we have an agreement with our trade unions called the Volvo Cars Euro- pean Dialogue (VCED), equivalent to a European Works Council. This agreement also regulates the election process for determining the representatives in the VCED. The purpose of VCED is to ensure that employees are informed and consulted on issues that affect work - force. The VCED meetings are held annually and include representatives from Sweden, Belgium, the Netherlands, Germany and Spain. Dis - cussions cover the company’s financial position, business, strategic and production outlook, as well as other employee-related matters. The council is also convened when major changes within the com - pany affect employees represented in the forum. In addition, employee representatives meet independently once a year, without employer representatives, to discuss and align on union-related topics. We have collective agreements with trade unions covering 74 per cent of our global workforce and apply work environment dialogues covering all areas in the company. In some areas, we apply social dialogue – an open and constructive communication between employer and employees – to strengthen trust, address workplace matters and promote fair and sustainable working conditions. Through the People Policy Assessment and annual follow-up, we review outcomes and initiate actions that ensure alignment with our standards and objectives. Collective bargaining coverage 2025 2024 Employees, % 74 70 Coverage rate Collective bargaining coverage Social dialogue Coverage rate, for countries with >50 empl. representing >10% total empl. Employees – EEA Employees – Non-EEA Workplace representation (EEA only) 0–19% — China — 20–39% — — — 40–59% — — — 60–79% — — — 80–100% Sweden Belgium — Sweden Belgium OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 184 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 185 ===== Social protection Volvo Cars has well-established principles for pension and insur - ance benefits, ensuring that we provide employees with protection and insurance. We continuously work to secure that our principles are implemented in all our regions. Fair compensation As a global organisation, we conduct business in a range of labour markets with different levels of social protection. Our Compensation & Benefits team is responsible for actions related to achieving fair compensation. To ensure that all employees receive equitable pay, we monitor salaries at all levels in the organisation. If any gaps are identified, an action plan is agreed upon and monitored. Any gaps that cannot be justified by factors such as job complexity, individual performance or market conditions should be rectified. To ensure our compensation practices are both fair and compli - ant, we regularly analyse pay levels across all countries in relation to local minimum wage and living wage benchmarks. This allows us to verify that our employees are not only compensated in accordance with legal requirements but also receive a compensation that sup - ports a decent standard of living. Our 2025 living wage benchmark analysis found that 100 per cent of our employees were paid at or above a living wage. The average total compensation gender pay gap amounted to 1.7 per cent in 2025. This result falls within the five per cent pay equity threshold, in line with our commitment to achieving gender pay equity by 2027. The gender pay gaps are analysed at regional and national level, and, if outside of the five per cent limit, addressed by action plans. We regularly analyse gender pay gaps by job complex - ity level in each country. Our analysis shows that most differences are driven by variations in seniority and experience rather than une - qual pay for equal work. We remain committed to gender pay equity and will continue to focus on ensuring fair and competitive compen - sation for all employees. Remuneration metrics 2025 2024 Gender pay gap, % 1.7 1.5 Total remuneration ratio 96 to 1 75 to 1 Our actions related to equal treatment and opportunities for all Learning and development It is essential to meet the need for skilled people to deliver on our business goals, and this year’s implementation of our new global learning management system My Learning further supports this pathway. As of this year, 84 per cent of our employees are now onboarded to the platform. Our course offering has been expanded by integrating LinkedIn Learning, giving our employees access to a broad and diverse content library. Furthermore, by mapping every employee to relevant skills and competencies, we established the foundation for personalised learning journeys to develop the skills needed. In 2025, we focused on upskilling, reskilling and competence development programmes in strategically important areas, including maintenance technicians, electrification, megacasting, software development, female leadership mentoring and digital skills. Our performance process, Continuous Dialogue, involves regular meetings between employees and managers to discuss perfor - mance, progress, development, learning and well-being. We foster a feedback culture through continuous feedback and one-on-one dialogues across all levels, extending beyond manager-team interactions. Performance and development reviews 2025 2024 Employees that participated in regular performance and development reviews, % White collars, % 90 96 Women, % 91 95 Men, % 89 96 Training hours 2025 2024 Average number of training hours per employee 18 21 Employees that participated in training, % 93 91 Inclusion and belonging We strive to build a culture of belonging where the freedom to be is embedded in our work – creating safe spaces for all dimensions of diversity, fostering deeper engagement and enhancing organisa - tional performance, enabled by the global Talent & Culture team. We have also introduced an inclusion index for measuring inclusion and belonging. This year, the inclusion index stood at 77, outperforming the benchmark of 76 and meeting our 2025 ambition of a score at least one point above the benchmark. This result reflects our ongo - ing efforts to enable an inclusive workplace where all employees feel valued and respected. Our ambition is to achieve an inclusion index score 3 points above the benchmark by 2030. Breakdown of employees by gender and age group, absolute numbers and (%) Executive Managemen t Team1) Senior leaders1) Total employees Women Men Total Women Men Total Women Men Total 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 <30 — (—%) — (—%) — (—%) — (—%) — (—% — (—%) — (—% — (—%) 2 (—%) — (—%) 2 (—% — (—%) 2,469 (6%) 2,886 (6%) 7,237 (16%) 7,038 (16%) 9,706 (22%) 9,924 (22%) 30–50 2 (25%) 3 (38%) 2 (25%) 3 (38%) 4 (50%) 6 (75%) 78 (18%) 71 (18%) 156 (36%) 140 (36%) 234 (53%) 211 (55%) 6,781 (15%) 6,867 (15%) 17,913 (40%) 17,809 (40%) 24,694 (55%) 24,676 (56%) >50 1 (13%) 1 (13%) 3 (38%) 1 (13%) 4 (50%) 2 (25%) 50 (11%) 44 (11%) 154 (35%) 132 (34%) 204 (46%) 176 (45%) 2,226 (5%) 2,143 (5%) 7,979 (18%) 7,670 (17%) 10,205 (23%) 9,813 (22%) Total share 3 (38%) 4 (50%) 5 (63%) 4 (50%) 8 (100%) 8 (100%) 128 (29%) 115 (30%) 312 (71%) 272 (70%) 440 (100%) 387 (100%) 11,476 (26%) 11,896 (27%) 33,129 (74%) 32,517 (73%) 44,605 (100%) 44,413 (100%) 1) In the categories ‘Executive Management Team’, ‘Senior Leaders’ an individual might be counted more than once. This is because each of these populations is considered separately, and thus overlap can occur. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 185 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 186 ===== All employees are encouraged to express themselves freely and share ideas in the workplace. During Pride Month, we made efforts to raise awareness and supported the theme ’Freedom To Be’. We also launched a global e-learning course on gender identity, intro - duced safe travel guidelines for LGBTQ+ employees and supported local initiatives to foster inclusion. We are committed to continue improving the share of women in senior leadership and remain committed to our gender diversity ambition. For 2025, our ambition was to achieve a year-over-year increase in the share of women in senior leadership. The restructur - ing process during the year had an impact on the share of women in senior leadership positions. Our 2030 ambition for women to hold 34 per cent of senior leadership positions remains unchanged, and we continue to work towards this ambition. Sustained efforts are ongoing to attract, support, engage, and develop female employees to increase representation. Several initiatives and employee devel - opment programmes have been launched to support this ambition. Our partnership with initiatives such as Girls Who Code further demonstrates our dedication to fostering the next generation of female leaders in technology and innovation. Volvo Cars is also a proud sponsor of Women in Tech, a community with the mission of increasing women’s participation in the tech industry. Women in management 2025 2024 Women in senior leadership, % 29.1 29.7 Women in leading positions, % 29.6 30.8 Women in external recruitment and internal promotion for leading positions, % 30.9 33.3 Threats and violence Our Corporate Security team is responsible for guiding all security related work carried out within the company and plays a vital part in ensuring Volvo Cars is a secure place to work. Through our corpo - rate security training, we inform managers about preventing work - place violence and other forms of disruptive behaviour. Our Corporate Security Incident Report channel encourages employees to anonymously report incidents of violent or threaten - ing behaviour. Corporate Security independently investigates all incidents that are reported. By reviewing incident reports, we can identify the potential causes of violence or threatening behaviour and implement prevention and mitigation measures. During 2025, our incident framework did not record any cases of severe threats or/and abuse of violence. Our actions related to other work-related rights Labour rights Human rights – People Policy Assessment The Labour Affairs team is responsible for actions within labour rights. To further strengthen our commitment to the People Policy and ensure compliance with human rights standards, we carry out People Policy Assessments – a practice that began as a project in 2017 and continues today. The process is in line with the UN Guiding Principles on Business and Human Rights. It assesses both potential and actual human rights impacts. The assessment involves desktop research, interviews with key internal and external stakeholders and on-site verification where 5-10 per cent of the workforce is inter - viewed. The result of the assessment is an action plan detailing pro - posed actions to prevent, mitigate and remediate negative risks and impacts. The action plan is followed up in a timely manner. In close collaboration with local management teams, awareness training activities have been carried out in prioritised markets. Man - agers are trained to maintain responsible business, based on desk - top analysis and information from NGOs. Training topics include legal requirements, stakeholder consultation, vulnerable groups and risk identification in a local context. Furthermore, short- and long- term action plans are prepared and the results of preventive meas - ures monitored. In line with our human rights priorities, we conducted four People Policy Assessment risk workshops in 2025. These workshops defined actions to strengthen human rights awareness, including a planned and structured follow-up. We also carried out a comprehen - sive People Policy Assessment at our factory in Floby, Sweden, with no critical findings identified. At Volvo Cars, we do not tolerate child labour and forced labour and through our People Policy Assessment, yearly follow-up and systematic age validations we secure compliance. We take swift and appropriate measures to address and remediate any negative impact caused by child or forced labour connected to our operations. During 2025, our records present zero instances of child or forced labour. Work-related incidents and complaints 2025 2024 Work-related complaints filed through channels for own workers to raise concerns 170 134   of which number of reported incidents of discrimi - nation or harassment 57 48 Fines, penalties and compensation paid as result of incidents and complaints, SEK — — Complaints filed to National Contact Points for OECD Multinational Enterprises — — Our ambitions To meet our workforce goals, we have established clear short- and long-term performance metrics such as inclusion index score, share of women in senior leadership and injury rate. Some ambitions, such as our gender diversity ambition, are also linked to our long-term incentive programme for senior management – emphasising its link to desired outcome and importance for the company. Corporate ambitions are approved and monitored by the Board of Directors, including employee representatives. The employee representatives in the Board bring workplace perspectives into decision-making and ensure that employee interests are represented. We inform our employees about performance in connection to union and work - force representative sessions, management and employee meet - ings. For disclosure of our ambitions and their timelines, we refer to each section respectively. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 186 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 187 ===== Definitions and methodology Headcount Headcount refers to counting each individual as one, irrespective of contracted working hours, employment type (e.g. temporary employees) or employee status (e.g. leave of absence). Employees Employees are defined as individuals who have an employment relationship with Volvo Cars. The reported figures include both permanent and temporary employees who are active and on leave of absence. Employee data is retrieved from the HR system and manually collected for the legal entities not included in the system. The data is then aggregated to generate the required metrics. Employee numbers are presented in headcount and reported at end of the reporting period. The figures differ from the number of employees presented in Note 8 to the Consolidated Financial Statement, due to these numbers are reported as average full-time equivalents. Cur - rently, Volvo Cars does not have details on employees identifying as other genders than female or male. During 2025, the employee data reporting scope has changed. More information can be found on page 207. Non-employees Non-employees are consultants who are not employed by Volvo Cars but whose work is supervised under the direction of Volvo Cars. Employee turnover rate Employee turnover rate is the number of employees leaving divided by average headcount as a denominator. The average headcount is the sum of number of employees on the last day each month over a year divided by twelve months. Family-related leave Family-related leave metric includes maternity, paternity and paren - tal leave (not carers’ leave) for all employees with a fixed pay on a permanent or part-time employment. Family related leave (regard - less of duration of absence) is based on a 12-month reporting period from 1 October to 30 September. The share of entitled employees that take family-related leave is calculated by dividing the number of employees that used the benefit with the total number of entitled employees. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 187 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 188 ===== Training hours Training hours data is compiled using consolidated reports from multiple learning systems globally. The average number of training hours per employee is calculated by dividing the total number of training hours recorded during the reporting year by the headcount number of employees. Gender-specific data is currently unavailable due to system limitations in 2025. However, it is our ambition to improve transparency and inclusivity by integrating this capability with our new learning management system in 2026. Performance and development reviews Performance and development review is interpreted as Volvo Cars’ performance process Continuous Dialogue. It is a year-long process with interim check-ins. There is no agreed number of check-ins since the number differs based on employee type and individual needs. Only active employees are considered eligible. Blue collar perfor - mance process and gender-specific data for blue collars are cur - rently unavailable due to system limitations in 2025. However, we intend to achieve standardisation and inclusivity in our processes. Severe human right incidents connected to own workforce Severe human rights incidents are defined in line with the UN Guid - ing Principles on Business and Human Rights and the UNGP Report - ing Framework. These incidents may occur within our own opera - tions or anywhere across our value chain, and relate to our salient human rights risks – those most likely to result in the most signifi - cant negative impacts on people through our activities, products, and business relationships. Severe incidents may include, but are not limited to, child labour, modern slavery and forced labour, serious health and safety viola - tions, and threats or occurrences of harassment, abuse, or violence. All cases are assessed individually, considering the scale, scope, and irremediability. These assessments apply across all tiers of our value chain and take into account the specific nature of the work, location, and vulnerability of affected individuals or groups. In accordance with ESRS S1, only incidents confirmed through our due diligence and investigation processes are reported in our annual Sustainability Statement. Cases still under assessment or not yet substantiated are not classified as confirmed incidents. Adequate wage For adequate wage, we apply a benchmark that exceeds the mini - mum requirements set out by the ESRS to ensure all employees earn a true living wage. Adequate wage is defined as the living wage for a standard typical family (family with two adults and two children). We utilised WageIndicator Foundation’s data to assess our wages against living wage benchmarks. If living wage is not defined for a country, the stipulated minimum wage for the relevant country is used. Internal base salary and fixed allowances are compared to the living wage in each country to ensure compliance. Gender pay gap Gender pay gap is the difference of average gross monthly pay between women and men, in relation to the average gross monthly pay for men, presented as a percentage. Gross pay is defined as the full-time base salary, fixed allowances, and annual bonus at target level. Pension is not included in gross pay. The variable components excluded from gross pay includes overtime, shift allowances and non-guaranteed allowances. Total remuneration ratio Total remuneration ratio is defined as annual total remuneration ratio of the highest paid individual to the median annual total remu - neration for all employees (excluding the highest paid). Annual total remuneration includes base salary, fixed allowances, variable com - ponents, benefits, pensions and incentives. The variable compo - nents excluded from gross pay includes overtime, shift allowances and non-guaranteed allowances. Senior leaders Senior leaders refer to an employee population which are leaders on job levels executive professional, executive manager and members of EMT. The percentage of women among senior leaders is calcu - lated by dividing the number of female senior leaders by the total number of senior leaders. Leading positions Leaders in leading positions are defined as people leaders who have direct reports. The metric women in leading positions refer to females within this group. Work-related fatalities Work-related fatalities include all employees, supervised contractors and independent contractors at our sites. Independent contractors are defined as contractors involved in the construction/reconstruction of Volvo Cars’ factories. Fatalities among contractors are only reported for projects in which Volvo Cars is the developer. Work-related injuries Work-related injuries include accidents requiring professional medical care with absence for at least one day beyond the day of the accident and where occupational health care or equivalent considers that there is no residual work capacity for the injured person. Rate of work-related injuries Rate of work-related injuries is defined as the number of work and occu- pational accidents reported with at least one day sick leave, divided by the total number of hours worked and multiplied by 1,000,000. Injury rate (Lost Time Case Rate, LTCR) Injury rate is an entity-specific disclosure related to our corporate ambi- tion of work-related injuries. This metric is calculated based on 200,000 hours worked and applies to a defined scope of the employees included in the central health and safety incident reporting system, representing approximately 94 per cent of the total headcount. Recordable work-related injuries A work-related injury is considered recordable if it results in any of the following: death, days away from work, restricted work or transfer to another job, medical treatment beyond first aid, or loss of conscious - ness; or significant injury or ill health diagnosed by a physician or other licensed healthcare professional, even if it does not result in death, days away from work, restricted work or job transfer, medical treat - ment beyond first aid, or loss of consciousness. Rate of recordable work-related injuries The rate of recordable work-related injuries represents the number of recordable injuries per standard base of work hours. The rate of recorda- ble work-related injuries is calculated per 1,000,000 hours worked. Number of days lost Number of days lost refers to the total number of calendar days that employees were unable to work due to work-related injuries, starting from the day after the incident occurred. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 188 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 189 ===== Workers in the value chain Identified material impacts, risks and opportunities (IRO) Type of IRO Time horizon Value chain WORKING CONDITIONS Secure employment In response to fluctuating production demands and new model launches, temporary contracts can be used throughout the value chain. While providing flexibility, it can lead to several negative impacts, including job insecurity. Potential negative impact Working time Workers in the value chain are impacted by risks associated with working excessive overtime. Actual negative impact Adequate wages Throughout value chain, especially for suppliers in countries associated with poor legislations to protect adequate wages, there may be a lack of fulfilling adequate wages. Actual negative impact Social dialogue, freedom of association, collective bargaining Operating in countries where restrictions on freedom of association and collective bargaining are restrained or do not exist, can impact workers by limiting their ability to negotiate for better working conditions. Actual negative impact Work-life balance Being in a transformative and competitive industry, might be a challenge to achieving good work-life balance, especially during development and launch phases. Potential negative impact Health and safety Workers in our value chain are exposed to risks in occupational health and safety, e.g. in plants and at mine sites. Actual negative impact Identified material impacts, risks and opportunities (IRO) Type of IRO Time horizon Value chain EQUAL TREATMENT AND OPPORTUNITIES FOR ALL Gender equality and equal pay for work of equal value Potential negative impact on the gender equality in the value chain, including right to equal pay. Potential negative impact Measures against violence and harassment in the workplace In some of the countries in which we have suppliers, sub-suppliers and retailers, there is a heightened risk of violence and harassment in the workplace. Potential negative impact OTHER WORK-RELATED RIGHTS Child labour In some countries in across our value chain, there is a risk of child labour. Extraction of certain raw material is associated with an increased risk. Potential negative impact Forced labour Risk for forced labour taking place within value chain, including vulner - ability to exploitation and human trafficking, especially in countries that have weak protection against such practices. Potential negative impact Privacy Negative consequences for individuals, if we fail to protect the reporting individual who file whistleblower reports. Potential negative impact Child labour Failure of proactively discover potential child labour in our value chain and proactively adapt to new human rights legislations pose a financial and reputational risk. Risk Forced labour Failure to proactively discover forced labour in our value chain and proactively adapt to new human rights legislations pose a financial and reputational risk. Risk We impact workers throughout our complete value chain, from the extractions of raw material to the end-of-life treatment of our products. Protecting and improving lives throughout our value chain is central to our sustainability strategy, which underpins our commitment to respecting and promoting human rights.  UPSTREAM    OWN OPERATIONS    DOWNSTREAM  SH ORT-TERM   MID-TERM    LONG-TERM OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 189 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 190 ===== Workers in the value chain Volvo Cars is a car maker with a global value chain, including many directly contracted suppliers and sub-suppliers, as well as retailers. In 2025, we purchased goods and services from approximately 12,000 directly contracted suppliers. Most of these supplier sites are based in China and Europe. Our retailer network spans 89 coun - tries with nearly 2,200 outlets. Our 33 largest markets have national sales companies that manage local retailer relations, while distribu - tion and service in smaller markets is handled by import companies and our global importer offices. Most of our retailers are located in Europe, US, Canada and China. Our global retail network employs approximately 60,000 people. As a result of our strategy and business model, workers in our value chain, upstream and downstream, are impacted. This includes suppliers and sub-suppliers of components and raw materials for automotive production, machinery and tools, as well as providers of services such as logistic, IT and cleaning. Our analysis concludes that potential material negative impact exists particularly in regions which are identified as high-risk from a human rights perspective (more information can be found on page 144) and in the context of certain raw materials (more information can be found on page 192). Furthermore, high-risk operations have been identified, including mine sites, smelters and refiners. In our downstream value chain, blue collar workers (e.g. those working in workshops) are associated with a heightened risk of negative impacts. Additionally, our assess - ment concludes that the risk of child and forced labour is particu - larly high in regions with weaker regulatory enforcement and in areas with widespread extraction of certain raw materials, such as cobalt, mica, tin, tungsten, tantalum and gold. Through our due diligence process we have identified groups of workers that are particularly vulnerable. These groups of workers include women, migrant workers and indigenous peoples. Women face a heightened risk of negative impacts, such as gender-based discrimination, harassment and unequal pay, while migrant workers are more at risk of negative impacts due to language barriers and limited legal protections. The risks for human rights violations affecting vulnerable groups are heightened in certain geographies, particularly where conflict, weak governance and/or economic ine - quality are present. We set sustainability requirements – including human rights – on our business partners, such as suppliers, sub-suppliers and retailers. Combined with the due diligence we conduct, these efforts aim to contribute to improving working conditions for workers in our value chain. Our policies Our Code of Conduct for Business Partners lists the human rights risks most relevant to our value chain, including material impacts such as forced and child labour. Our retailers, suppliers and subcon - tractors throughout our value chain are obliged to comply with the Code of Conduct for Business Partners or similar principles. It does specifically point out that Business Partners shall take particular consideration for vulnerable groups. The Code of Conduct for Business Partners outlines that business partners shall provide access to effective grievance channels and remedial mechanisms for employees and other stakeholders poten - tially affected by its activities. This includes local communities and vulnerable groups, enabling them to raise legitimate concerns related to any area covered by the Code of Conduct for Business Partners. Furthermore, it is conveyed that business partners must take measures to prevent similar occurrences in the future, including implementing appropriate and timely corrective actions. Lack of cooperation, failure to address violations, or delays in taking correc - tive action can result in claims, loss of business and ultimately ter - mination of the business relationship with Volvo Cars. Our purchasing agreements and contract templates for suppliers include commitment to comply with the Code of Conduct for Busi - ness Partners. This obligation requires suppliers to conduct human rights due diligence and cascade these requirements to both direct and indirect business partners. The Volvo Cars Sustainability Requirements address specific focus areas of sustainability within the company’s supply chain and is part of the Volvo Cars Purchasing agreement. Volvo Cars’ position paper on responsible sourcing applies to sup - pliers of components containing Raw Materials of Concern (RMoC). The purpose of the document is to convey the company’s due dili - gence efforts relating to RMoC (more information can be found on page 192) and outlay our high-level requirements on our suppliers in this area. Engaging with workers in our value chain To understand our impact on workers in our value chain, we conduct interviews with selected workers during on-site audits. Such selec - tion aims at securing a broad range of perspectives, including those from vulnerable groups. When auditing mine sites in the battery supply chain, representatives of surrounding communities – includ - ing indigenous people, where applicable – are also interviewed. If non-compliance is identified, corrective action plans are established for the suppliers to implement. We monitor the status of the correc - tive action plans to verify that identified issues are resolved and improvements for the affected individuals are implemented. The audit results also serve as valuable input to our continuous improvement of human rights due diligence, aimed at identifying, preventing and addressing human rights impacts in our supply chain. Furthermore, we strive to have dialogues with NGOs about responsi - ble business practices in global supply chains. Insights from such dialogues serve as input in our due diligence efforts, including build - ing an understanding of how rightsholders in our value chain may be impacted by our direct and indirect operations, and what actions we can undertake to drive improvement. We are working to enhance our processes for gathering input from workers and rightsholder proxies across our upstream and downstream value chain, and integrating these insights into our broader human rights due diligence efforts and business decision-making. The Head of Procurement is operationally responsible for ensur - ing engagement with workers takes place and that the resulting insights are factored into our business decision-making. Grievance reporting channel We encourage employees and other stakeholders to report illegal activity or violation of our Code of Conduct and Code of Conduct for Business Partners. Reports can be submitted via our Tell Us report - ing channel, more information can be found on page 202. Our Code of Conduct for Business Partners requires that business partners provide access to grievance channels and remedial mecha - nisms. We monitor compliance among suppliers through various supplier assessments, such as on-site audits. Deviations are tracked through corrective action plans to ensure they are being effectively addressed. In 2025, we started to explore how Tell Us can be supplemented to increase the reporting opportunities for workers in our value chain and related communities. To manage this in an effective OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 190 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 191 ===== manner, we are investigating different collaboration platforms. We are also exploring ways to ensure that rightsholders, or their proxies, are meaningfully involved throughout the grievance process. Our actions in the supply chain Our Procurement department is responsible for the implementation of human rights due diligence, including compliance with our Code of Conduct for Business Partners and wider sustainability require - ments. Additionally, representatives from the Procurement depart - ment are part of the cross-functional Human Rights Core team, working to ensure consistency of our human rights due diligence efforts in our value chain. Human rights due diligence in our supply chain Our due diligence activities form an ongoing, proactive and reactive process that aims to identify and address risks and impacts on workers in our value chain. It is continuously improved through engagement with suppliers and other stakeholders, as well as insights from previous due diligence efforts and emerging risks. In line with international guidelines, we take a risk-based approach to human rights. This means we focus on human rights at greatest risk of the most severe negative impact on people – our salient human rights issues (SHRIs)– which also are identified as material impacts. A s part of this risk-based approach, we have iden - tified a list of high-risk countries, activities and operations, along with a set of raw materials associated with heightened risk of nega - tive human rights impacts. They serve as key guidance when defin - ing our annual human rights due diligence plan for our upstream and downstream value chains. In addition, risk alerts from media, NGOs, and stakeholders regularly lead to updates to our due diligence plan. In addition to the annual plan – which includes enhanced due dili - gence activities such as audits of high-risk suppliers – we perform basic due diligence on our suppliers, regardless of risk-level, to identify risks related to potential material impacts. Both basic and enhanced assessments are based on the human rights due diligence procedures (more information can be found on page 143) and aim to identify and assess risks and impacts, while implementing actions to cease, prevent and mitigate them. Assessments are carried out before agreements are finalised and periodically thereafter. Meeting our sustainability requirements is a prerequisite for supplier selection. Through our due diligence processes, including the operation of our grievance mechanism, we identified various instances of non-compliance with our Code of Conduct for Business Partners. In response, we have implemented targeted corrective action plans and are closely monitoring their execution to ensure that all required measures are completed in a timely and effective manner. Basic due diligence Basic due diligence applies for directly contracted suppliers and includes assessments such as the Sustainability Assessment Ques - tionnaire (SAQ), risk screenings and on-site visits. These serve as a base for identifying and assessing risks related to material impacts. Areas reviewed include whether the supplier has policies and man - agement systems covering health and safety, child and forced labour, wages and benefits, women’s rights, non-discrimination and harassment. If suppliers fail to meet our requirements, they must take corrective actions, which our teams follow up on to verify com - pliance. If risks remain, we may conduct enhanced due diligence, such as an audit, to better understand the potential impact and plan actions to cease, prevent or mitigate it. Sustainability Assessment Questionnaire The SAQ was developed by Drive Sustainability, a collaborative initi - ative within the automotive industry. All responses are validated by an external assessor. The SAQ response indicates the extent to which suppliers meet our sustainability requirements and has been mandatory in our sourcing process since 2019. Existing suppliers are required to complete the SAQ every two years, along with improve - ment recommendations based on their results. In 2025, 1,350 sup - pliers (82 per cent) submitted a SAQ, of whom 96 per cent were compliant with our requirements. SAQ compliant suppliers 2025 2024 Directly contracted suppliers with completed SAQ 1,350 1,417 Directly contracted suppliers with completed SAQ, % 82 88 Directly contracted suppliers SAQ compliant, % 96 95 Risk screenings Suppliers undergo screenings to identify and mitigate risks in the areas of anti-corruption, trade sanctions and human rights. The screenings are done prior to sourcing and during ongoing business. The screening helps to inform need of potential additional due diligence. Enhanced due diligence Enhanced due diligence applies for suppliers associated with an increased risk of material impacts: • Directly contracted suppliers identified as high-risk in our basic due diligence, in our human rights risk assessment or through alerts from stakeholders. • Suppliers delivering components containing RMoC, including the battery supply chain. Enhanced due diligence includes auditing, training and consultation. It aims to provide a deeper understanding of the supplier’s responsi - ble sourcing practices – both generally and in relation to our material impacts – and to drive improvements where needed. It provides extensive data on several potential material impacts, including, but not limited to, child labour and young workers, forced labour, har - assment and verbal/physical abuse, health and safety, access to grievance mechanism and freedom of association. It also includes corrective actions for suppliers to cease, prevent and mitigate iden - tified risks and impacts. We work closely with our assigned external organisations (more information can be found on page 139) to set processes and well-established standards for audit execution and verification of corrective actions, in our continuous efforts to improve working conditions for workers in our value chain. Audits of directly contracted suppliers Directly contracted suppliers identified as high-risk – e.g. in the human rights risk assessment and new suppliers located in high-risk countries, undergo comprehensive on-site auditing according to the Responsible Business Alliance Validated Assessment Program (RBA VAP) or equivalent standard. These audits are carried out by accred - ited third-party auditors over two to five days. They evaluate several material impact areas, including labour rights (such as forced and child labour, discrimination, working hours, wages and benefits, humane treatment, freedom of association, harassment and worker rights) health and safety, as well as environmental practices and business ethics. Since May 2021, 334 suppliers have been in scope for this audit requirement, with 35 added in 2025. During 2025, 22 audits were conducted out of the 35 planned. The RBA VAP audits were per - formed in China, Mexico, India, Turkey, Malaysia, Vietnam, Philip - pines, USA, Romania, Hungary and Sweden. Since 2018, 394 RBA audits have been carried out on our directly contracted suppliers, 64 of these were conducted in 2025. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 191 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 192 ===== In 2025, most audit findings are found in the areas of labour, health and safety. Findings relating to labour include e.g. exceeding work - ing hours (workers not receiving a day off according to legal require - ments and working too many consecutive days) as well as wage related issues. Health and safety findings mainly relate to emer - gency preparedness e.g. lack of exit signs and emergency lights, block of emergency exits and no fire drills performed during night shift as well as occupational health and safety e.g. insufficient usage of personal protection equipment and inadequate number of trained first aid personnel. Audit findings are summarised in a report that includes non- conformities and a list of agreed corrective actions for supplier to implement within set timeframes. Examples of corrective actions for suppliers to take include revising shift arrangement procedure to control the working time, work out reasonable and practical produc - tion plans and update company working hours policy as well as conduct special personal protective equipment inspections every month and set up a process to ensure fire drills are performed dur - ing night shifts. We monitor progress on these action plans to ensure measures are taken. If a supplier fails to take the agreed actions, we initiate discussions to identify root causes and explore ways to support the supplier in meeting audit requirements and our Code of Conduct for Business Partners. 85 per cent of corrective measures agreed with suppliers in 2024 have been addressed. If suppliers do not meet our requirements – such as accepting an audit or imple - menting corrective action plans – the case is escalated according to our process. By supporting the supplier and using our leverage, we strive to bring the supplier into compliance with our requirements, with contract termination as a last resort. Raw Materials of Concern (RMoC) We define 20 minerals, metals and bio-based materials: aluminium/ bauxite, cobalt, copper, gold, graphite (natural), lead, leather, lithium, magnesium, manganese, mica, nickel, phosphorus, rare earth ele - ments, rubber (natural), steel/iron, tantalum, tin, tungsten, wool as RMoC due to their high risk of material impact on people and planet during their extraction, processing, trade and transportation. We aim to increase transparency, enhance traceability and mitigate environ - mental, social and governance risks in these supply chains. To date, we have mainly focused on battery raw materials, including cobalt, nickel, lithium, graphite and mica as well as tin, tungsten, tantalum and gold. BASIC AND ENHANCED DUE DILIGENCE – A RISK-BASED APPROACH Chain of custody of cobalt, lithium, nickel and graphite used for the batteries and mica used in battery isolation sheets. 1) Responsible Business Alliance (RBA) Validated Assessment Program (VAP) 2) OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. Initiative for Responsible Mining Assurance, Standard for Responsible Mining Critical Requirements (IRMA) 3) OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. Environmental, Social, Governance module aligned with the EU Battery Regulation 4) Responsible Minerals Assurance Process (RMAP) Directly contracted suppliers BASIC DUE DILIGENCE • Assessments to review conformance with Code of Conduct for Business Part - ners and ESG performance • Risk screenings HIGH-RISK COUNTRIES: • New directly contracted suppliers located in high-risk countries HUMAN RIGHTS RISK ASSESSMENT: • Suppliers identified in our human rights risk assessment. ALERTS: • Suppliers identified based on input from internal and external stakeholders as well as from basic due diligence. ENHANCED DUE DILIGENCE AUDIT (RBA VAP)1) AUDIT (RBA VAP)1) AUDIT (RBA VAP)1) PRIORITISED RAW MATERIALS OF CONCERN: CHOKE POINT/SMELTER VALIDATED BY A THIRD PARTY TO BE RMAP4) CONFORMANT CONFLICT MINERAL REPORTING TEMPLATE TIER-1 SUPPLIERSTIER-N SUPPLIERSRAW MATERIAL SUPPLIER BUSINESS CONDUCT BUSINESS CONDUCT • Suppliers in the battery supply chain ( cobalt, lithium, nickel, graphite and mica ) • Suppliers of components containing conflict minerals (3TG) AUDIT (OECD DDG AND ESG)3) AUDIT (OECD DDG AND ESG)3) AUDIT (OECD DDG AND IRMA)2) OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 192 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 193 ===== Hence, in addition to identifying high-risk suppliers based on loca - tion and activity, suppliers of components containing RMoC are considered high-risk in relation to our identified material impacts, and are therefore prioritised for enhanced due diligence. Audits of suppliers in the battery supply chain We recognise that battery supply chains are complex, and the raw materials used in batteries carry significant environmental, social and governance risks, including potential material impacts. There - fore, effective traceability is vital, from raw material extraction through each tier of material processing. Since 2019, we collaborate with the blockchain technology firm Circulor in tracing the battery raw materials using blockchain. Our chain of custody program cur - rently covers cobalt, lithium, nickel, graphite (for batteries) and mica (for battery insulation). We have commissioned independent audits of suppliers in our bat- tery supply chain from SLR Consulting (previously RCS Global) since 2019. The purpose of the audits is to assess supplier conformance and to help ensure continuous improvement of responsible sourcing performance across our battery supply chain by monitoring the implementation of corrective action plans. Our audit standards include modules aligned with the EU Battery Regulation and OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. Mine site audits are con- ducted against the Initiative for Responsible Mining Assurance (IRMA) Standard for Responsible Mining Critical Requirements or equivalent schemes. The audit scopes allow us to gain a broad understanding of our identified risks and potential material impacts. Furthermore, it enables us to drive improvements where needed and meet stake - holder expectations for due diligence in the battery supply chain. In 2025, we conducted 23 audits in our battery supply chain. These included four battery suppliers, three anode/cathode produc - ers, nine refiners, one treatment unit, four mine sites and two suppli - ers in the mica (battery insulation) supply chain. The audits were conducted in China, Indonesia and Zimbabwe. The 2025 audit results in the battery supply chain show that most findings relate to deficiencies in management systems (e.g. poor responsible sourcing policy, lack of supplier engagement and insuffi- cient grievance mechanism). Other common findings relate to risk management such as poor risk assessments and procedures for eval- uating identified risks as well as labour and working conditions, including excessive overtime, no emergency response kit easily avail- able, lack of safety exit signs and insufficient fire drills. We work closely with our suppliers and audit partner to ensure that corrective measures are implemented within agreed time - frames. To help suppliers in the battery supply chain fulfil their com - mitments, we invite selected suppliers to participate in trainings about the concerned audit standards. Over the past year we have noted a positive trend among suppliers that have participated in this training. The audit performance has proven to improve after staff members have attended the training. Other activities relating to the battery supply chain In 2025, we continued to build on our work with traceability in the battery supply chain by extending the battery passport to additional car models beyond the Volvo EX90 which was released with a pass - port in 2024. In December 2025, the following countries of origin were present for models with battery passports: Raw Materials of Concern Country of Origin Cobalt China, Democratic Republic of the Congo Lithium Brazil, China Nickel Australia, China, Indonesia Natural graphite China Moreover, in 2025 we assigned an external party to assess our readi- ness for the EU Battery Regulation, with a focus on the due diligence requirements. The assessment covered areas such as processes, gov- ernance, grievance mechanism and chain of custody. The assessment guides us in our continuous preparations ahead of the legislation. Reporting of Conflict Minerals Our ambition is to source all components containing tin, tungsten, tantalum and gold (commonly referred to as 3TG or conflict miner - als) from supply chains where every smelter and refinery has under - gone third-party assurance. We annually request our suppliers of such components to disclose their due diligence practices and provide detailed information on the smelters they use, using the Conflict Minerals Reporting Template (CMRT) developed by the Responsible Minerals Initiative (RMI). By tracing the origin of these minerals and encouraging the use of smelters validated through the Responsible Minerals Assurance Process (RMAP), we aim to advance responsible sourcing in alignment with global standards. While the current reporting period is still underway, in the previ - ous full CMRT reporting period (2024), 63 per cent of 3TG smelters and refiners in our supply chain have achieved RMAP compliance. We continue to refine our due diligence efforts by strengthening supplier engagement, expanding internal review processes and addressing challenges related to traceability and geopolitical risks. RMAP compliant smelters 2025 2024 RMAP compliant smelters in the 3TG supply chain1), % 63 63 1) Figures disclosed for the RMAP reporting period 1 October to 31 May. Audits 2025 2024 Audits of directly contracted suppliers (RBA VAP) 42 43 Audits of new directly contracted suppliers located in risk countries (RBA VAP) 22 25 Audits in the battery supply chain 23 28 Total number of audits 87 96 Share of addressed RBA VAP audit improvement findings, % 85 92 VOLVO CARSREFINER BATTERY PRODUCERTREATMENT UNIT ANODE/CATHODE PRODUCERMINE BATTERY SUPPLY CHAIN OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 193 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 194 ===== Training In 2025, we trained suppliers and key staff in our procurement department on responsible sourcing practices with the overall aim of improving the conditions for people in our supply chain and related communities. All procurement leaders globally participated in a human rights training aiming at increasing the understanding of SHRIs, identified material impacts, as well as of the due diligence process. The train - ing also clarified the role of leaders in the human rights due diligence work. Furthermore, all procurement leaders globally also took part in a compliance training covering areas such as export control, trade sanctions and anti-corruption. Additionally, buyers received training on the updated Code of Conduct for Business Partners and in the RBA VAP audit standard and its content. Furthermore, buyers of batteries received training on the requirements in the EU Battery Regulation and an extensive e-learning about Volvo Cars RMoC was launched for employees in Procurement, Engineering and other relevant functions with the overall aim to increase awareness of the issues related to these materials and driving positive change. Buyers and other relevant staff also participated in trainings about CO 2 target setting and the buyers in the Sustainability Champions network was given training in topics such as circular economy, water, trade sanctions and anti-corruption. Suppliers in the battery supply chain received training on applica - ble audit standards, covering several of our material impacts. Also, selected suppliers in high-risk countries were given training on our sustainability strategy and requirements as well as our RBA VAP audit program. Our actions in the retail network Volvo Cars’ retail partners are required to follow our Retailer Stand - ards for compliance with the Code of Conduct for Business Partners and specific requirements on health and safety. The Retailer Stand - ards are audited annually. Additionally, due diligence and screening are conducted for retail partners in countries identified as high-risk for sanctions and corruption, both prior to initiating a contract and at regular intervals during the business relationship. In 2024, we performed a gap analysis to further improve our human rights due diligence, mitigate potential violations of our Code of Conduct for Business Partners and identify areas of improvement. This resulted in introducing more stringent Retailer Standards in 2025. Also in 2025, training on human rights and the availability of grievance mechanisms was made available to all retailer employees globally. Our ambitions Our current framework does not yet include outcome-oriented targets to assess the efficiency of our actions. Nevertheless, we have established processes to follow up with our business partners and ensure that agreed corrective actions are implemented in a timely manner upon identification of non-conformities with our requirements. The results of audits, along with evolving business and geopolitical contexts, are pivotal in refining our methodology, identifying priority areas, and addressing process gaps to prevent recurrence among business partners. These measures enhance our capacity to mitigate and prevent adverse impacts on workers throughout the value chain. Furthermore, we monitor the number of audits conducted and track the closure rate of corrective action plans arising from these audits. Our aim is to achieve continuous year-over-year improve - ment in the number of audited sites within the value chain. We are continuously improving our risk-based approach to human rights due diligence, including our methods for assessing the efficiency of our actions. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 194 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 195 ===== Consumers and end-users We impact customers by shaping their daily lives and experiences through our products. Safety is an integral part of our purpose, to provide freedom to move in a personal, sustainable and safe way. We stay committed to leadership in safety and a higher quality of life for people, safeguarding personal information and upholding data protection standards. Identified material impacts, risks and opportunities (IRO) Type of IRO Time horizon Value chain PRIVACY Potential negative impact in consumer and end-user data privacy if there are data misuses, or insufficient data security and handling practices, including how information is collected and stored through its services. Potential negative impact A potential financial risk if consumer and end-user privacy is overlooked or inadequately protected, which could result in costs for the company and diminished consumer trust. Risk PERSONAL SAFETY Consumers may be involved in an accident that will harm themselves or others. Potential negative impact  UPSTREAM    OWN OPERATIONS    DOWNSTREAM  SH ORT-TERM   MID-TERM    LONG-TERM OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 195 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 196 ===== Our customers Safety is part of our DNA. For us, it is about helping to protect peo - ple in and around our cars. Since the early 1970s, we have been col - lecting and analysing data from over 50,000 real-world traffic acci - dents, involving over 80,000 people in Volvo cars. This is done while safeguarding data privacy as we see data safety as part of our safety strategy. The information we collect inform and guide our continu - ous work toward our zero collision vision, as part of our overall strat - egy and business model. We sell cars to customers through a combination of global dealer - ships and online sales. Our product offering also includes accesso - ries, charging solutions, spare parts and services. We have a strong global presence, with key markets in China, Europe and Americas. Our customers include customers who own a Volvo car or who have signed service agreements with us, including both private and busi - ness customers. Business customers include a variety of buyer types, such as fleet buyers and company car buyers. Our philosophy is to design cars to be equally safe for everyone, regardless of gender, age, height, shape or weight, including the youngest passengers. Child safety is one of our top priorities and has been at the heart of what we do since 1972, when we became the first car manufacturer to launch a rear-facing child seat. We also care deeply about other vulnerable road users, including pedestri - ans and cyclists. The topics we have identified as potentially having negative impact on customers and end-users relate to personal safety and privacy. These potential negative impacts of private safety are mainly linked to isolated incidents, such as accidents, while data breaches of consumer data can affect individuals or occur on a much wider scale. While such events would impact our customers, it may also pose a financial risk if personal data is misused or inade - quately handled. That is why our digital landscape and architecture is designed to respect privacy and protect the personal data we hold. Safety – Customer engagement Engagement with customers on safety Throughout the process of designing and building a Volvo, we put people first, making the perspective of our customers ours. We engage with customers to enhance the safety of our cars and the communication plays a crucial role in continuously improving them. During the development phase, we use real-world data from our customers. This data is gathered from actual accidents and inci - dents to guide our safety approach. Crash tests are only as valuable as the real-world data behind them. We turn this data and its insights into new safety innovations, helping cars better understand and respond to the world around them. We carefully analyse the insights we collect from our customer engagement, and they guide how we continuously improve customer satisfaction and safety aspects, for example, with the new multi -adaptive safety belt, further described below. During the car ownership stage, we interact with the customers on safety aspects through various touchpoints. Customers can con - tact us around safety aspects through various channels such as cus - tomer care, the Volvo app and the vulnerability reporting line. How - ever, the communication is not limited to only customer-initiated communication. Proactive communication, such as safety updates, service reminders and other valuable information is provided to cus - tomers and demonstrate our commitment to safety. Despite our extensive quality control programmes, safety issues may still occur and affect customer safety. In these rare cases, our quality function is involved to investigate and if needed make a recall, to have the issue corrected even if there are no reports of incidents. We believe that safety learnings should be shared, but privacy must always be protected. We never share our crash database, only the life-saving insights we have gained from it. No identifiable infor - mation about those involved is ever disclosed. We use this data for safety research only, in full compliance with data protection laws. In conclusion, all these insights in customer experience can guide us further in our safety work, helping us prioritise areas that need improvement. Customers’ grievance Furthermore, our grievance channel, Tell Us, is available to all cus - tomers and end-users for reporting cases of suspected non-compli - ance. Actions taken to provide or enable remedy for actual material impacts on our customers are managed as part of our remediation process. More information on reporting channels and remediation can be found on page 202. During 2025, we received no alerts of non-compliance with international human rights principles or severe human rights issues and incidents related to customers and end- users. Safety – Our guiding principles Five guiding principles to safety design Safety is at the core of our purpose, culture and vision. In protecting what is most important to our customers, we always strive to develop our cars with safe, intelligent technology designed around the human being. While not a standalone policy, our Guiding Princi - ples for Safety serve as a foundational framework that steers our daily operations and safety initiatives. These principles work in conjunction with our Code of Conduct for Business Partners, more information can be found on page 142. We apply five guiding princi - ples to design and build cars safe for our customers and those around the car. These principles are applied in our operation and are embedded in our requirements with business partners to safeguard safety in our products. Safety is always in focus and part of our strategy, and EMT is responsible for making sure safety principles are applied throughout the organisation. Safety-first For us, safety should not be an add-on or a choice. Drawing on dec - ades of real-world accident research, we use our extensive safety data and expertise to guide fundamental design principles. The benefits of this research are built into every detail of our cars from the earliest stages of development. Equal safety for all We apply our safety principles to everyone, regardless of gender, age, height or weight. Over the years, these principles have led to innovations such as WHIPS (Whiplash Injury Protection System), SIPS (Side Impact Protection System), the safety belt and numerous child safety features. The Volvo Cars Safety standard – lead and exceed industry standards Based on extensive data and knowledge from real-world accidents, we developed the Volvo Cars Safety Standard to help protect peo - ple in real situations, often going beyond standardised test proce - dures, legislation, and rating metrics. We test and validate our cars in a wide range of test scenarios, for helping to prevent collisions and if a collision occurs, how to reduce injury risk. In addition, we use advanced human body models – virtual representations of people of different gender, age and body shapes – to better reflect real-world diversity in our development process. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 196 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 197 ===== Our system safety process for using software and electronics in advanced safety-related functionalities are based both on ISO 26262 (Road vehicles - Functional safety) and ISO 21448 (Safety of the intended functionality). Life-centric innovation Cars are driven by people living busy lives and providing them with a safe space is the basis for our Safe Space technology. Through inno - vative technology, we aim to improve safety for everyone, both inside and outside our cars. Our next generation cars feature our sharpest set of sensors ever. Combined with core computing and our Driver Understanding System, we can further help improve collision avoidance and driver assist functions. We have also introduced occupant sensors using interior radars to help prevent children or pets from being left unattended. All for safety Safety knowledge and innovation is far too important to keep to our- selves. We have a long-standing tradition of sharing our research with the automotive industry making it freely available on our website. Our commitment to safety is part of a collective responsibility that bene - fits all road users. Safety – Our actions Safety beyond the stars We support our vision of zero collisions by investing in various activi - ties and striving to exceed standard safety requirements. Our safety actions combine proactive accident prevention, research and col - laborations. This is managed by several functions within Volvo Cars with different roles and responsibilities within safety, to cater for R&D activities, construction and safety testing. Our Product Development Process The Volvo Cars Product Development Process structures the evalu - ation of product development and compliance with our Volvo Cars Safety Standard. Safety status is reported and monitored at pro - gramme gates and must be approved before car programmes are allowed to proceed. During product development, we use advanced computer simula - tion to evaluate safety status and improve our designs. From pro - ducing prototypes to starting production of a completely new car on a new platform, we conduct more than one hundred complete vehicle crash tests and numerous system and subsystem tests in our crash lab to evaluate safety performance. Safety research Since 1970, our Traffic Accident Research Team has gathered com - prehensive data from real-world accidents. These accidents help us research more complex factors behind accidents. Our long-term focus on safety research, grounded in real-world data, has proven to be successful – leading to several safety world-first safety innova - tions that have saved countless lives. Additionally, we collaborate with academia and insurance institutes to help drive research in the field of automotive safety. In 2025, we unveiled the new multi-adap - tive safety belt that is included in our EX60. This is a major safety improvement designed to better protect people by adapting to traf - fic variations and the person using it, thanks to real-time data from the car’s advanced sensors. The capabilities are designed to contin - uously improve as we gather more data and insights, improving the car’s understanding of occupants, new scenarios and response strategies. Awards and safety ratings Volvo Cars has been a leader in automotive safety for decades. In addition to the benefits of our real-world research, many of our models have earned top ratings in official safety assessments such as Euro NCAP, IIHS and US NCAP. Many of our innovations have become industry-standard features. The Volvo EX90 earned a maxi- mum five-star rating in the most recent EU NCAP safety testing and scored particularly high both in adult and child protection catego - ries. We were honoured by the World Car Awards as “World Luxury Car”, recognising our advanced safety technology. In 2025, we received the Sandy Myhre Award by Women’s Worldwide Car of the Year for being the most committed car brand for women – a recognition partly driven by our long-standing commitment to safety and our pioneering work in female crash test dummies. Safety – Our ambitions Volvo Cars’ safety vision is to prevent anyone from being killed or seriously injured in a new Volvo car, aiming for a future with zero col- lisions. However, there is no specific, measurable outcome-oriented ambitions derived from safety objectives. We constantly investigate real-world accidents with personal injuries to learn more about their origin and how we can help prevent them. Quality – Customer engagement We value our customers’ opinions and actively seek their feedback. The voice of the customer gives important insights to our quality work and shapes our customer-focused way of working. By interact - ing with customers at various touchpoints during the customer jour - ney, we collect valuable insights on customer satisfaction – covering both product issues (car and app) and difficult-to-use aspects. We also ask customers about their satisfaction with sales and service experiences. We engage with customers mainly through channels like surveys, customer care, social media and our dealer network. To ensure customers’ trust, we inform on the purpose and objective from the data we collect as well as our Data Protection Policy. The customer data we receive is carefully analysed and guides us to con - tinuously develop customer satisfaction. Our customer -focused way of working is described by the quality wheel. Closing the loop is the final step of the voice of the customer cycle, and its efficiency is ensured by making iterative improvements. Quality – Our approach Our quality work is driven by customer satisfaction. For us, quality is not just about the product – it is about the entire customer experi - ence and journey. Our definition of quality encompasses the car and the app as well as the sales and service experience. Quality is inte - grated into our entire business and affects all our employees. We always act in the best interests of our customers, ensuring high quality at every step to deliver customer satisfaction. Our approach to quality is defined in our Commitment to Quality and in our Code of Conduct. We collaborate across organisational boundaries and in a global quality governance structure. By integrating actions across various areas, we can swiftly address customer issues and enhance satis - faction, delivering a seamless and comprehensive customer experience. We comply with relevant regulatory requirements to which our products and services need to conform. Any potential quality issues OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 197 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 198 ===== must be addressed without delay, ensuring strict quality assurance at every stage and supported by continuous learning. We follow globally recognised industry standards such as the Automotive Industry Action Group (AIAG) standards. This helps strengthen our position as a quality-driven car maker and our part - nerships throughout the supply chain. In addition, by integrating Advanced Product Quality Planning (APQP) into our quality pro - cesses, we improve supplier engagement, reduce launch risks and drive continuous improvement in a structured manner, ensuring product quality and customer satisfaction. By conducting thorough quality risk assessments and minimising risk exposure through internal audits of our quality management system, we ensure the highest standards of quality and reliability. As an ISO 9001 certified company, we adhere to recognised stand - ards for quality management and apply a customer-focused approach, with annual external audits performed by a third-party agency. Voice of the customer Built-in quality THE INPUT Customer satisfaction Early detection & resolution THE OUTPUT Continuous learning Outflow prevention Quality – Our actions With a dedicated customer-focused work throughout the entire company, we strengthen the quality aspect and increase our cus - tomers’ satisfaction. Our way of working with quality is an iterative process placing the customer in focus. We apply a proactive and structured way of working with quality by following five steps that results in improved customer satisfaction. 1. Voice of the customer – We actively listen to feedback across car, app, sales and service to guide decisions that enhance the customer experience. 2. Built-in quality – Quality is designed into every step, ensuring a seamless and premium experience for customers. 3. Outflow prevention – We validate before launch to prevent issues and ensure standards are met, including the customer’s perceived expectations of quality. 4. Early detection and resolution – If problems occur, we respond quickly and effectively to minimise impact on customer experi - ence. 5. Continuous learning – We learn from every issue to improve how we work internally, so the result is a better and more seamless customer journey. Quality – Our ambitions During the reporting year, we have united around a company-wide quality ambition: to be number one in Customer Satisfaction by 2029. This ambition resonates strongly with all employees, fosters a culture of customer centricity, and ensures that our customers remain our number one focus in everything we do. We measure progress towards Customer Satisfaction number one through a consolidated global index that captures satisfaction across every stage of the customer journey: car, app, sales and service – based on leading external studies such as J.D. Power covering the majority of our sales volume. To complement this, we set targets and monitor progress on customers’ satisfaction with the car, app, sales and service through internal studies that correlates with the external ones. These are conducted on a more frequent basis giving us early indications of satisfaction levels and the opportunity to act quickly if we detect a trend break in the satisfaction curve. This is our operational meas - urement system which operates at a more detailed level. We link annual ambitions to it, and its results are regularly and carefully monitored. Ambitions are set from an outside-in perspective to ensure competitiveness against global benchmarks. Our internal surveys are conducted continuously, generating results, that provide us with insights on customer satisfaction. Our cross-functional governance structure ensures accountabil - ity and continuous improvement. Monthly executive and functional forums review performance, guide priorities, and drive actions to achieve our ambition. The Quality and Customer Satisfaction Executive Meeting, including EMT members, meets with the purpose to provide guidance and govern, but also to review progress and discuss actions for continuously improvement. In the Quality and Customer Satisfaction Matters Meeting, EMTe meets with the aim of focusing on achieving ambitions. Looking ahead, we are investing in advanced analytics, digital tools and proactive engagement to anticipate customer needs and deliver experiences that set new standards for the industry. Privacy Our work on data protection and privacy follows our general approach to managing both the impacts on individuals and the potential risks to Volvo Cars. More information on our policies and the actions we take to manage these impacts and risks can be found on page 203. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 198 VOLVO CAR GROUP  / SUSTAINABILITY / SOCIAL INFORMATION ===== SIDA 199 ===== Governance information Business conduct PAGE 200–205 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 199 VOLVO CAR GROUP  / SUSTAINABILITY / GOVERNANCE INFORMATION ===== SIDA 200 ===== Business conduct We conduct business responsibly and foster a strong ethical culture. Acting ethically is not only the right thing to do – it is the foundation for creating sustainable and long lasting value. Guidance from our Code of Conduct together with our culture and leadership principles, shapes how we work as one team and how leaders lead every day to create long-term value. Identified material impacts, risks and opportunities (IRO) Type of IRO Time horizon Value chain CORPORATE CULTURE Failure to act in line with our corporate culture and to adequately address unwanted behaviours can result in regulatory violations, reduced morale. Potential negative impact PROTECTION OF WHISTLEBLOWERS Failing to protect whistleblowers could have serious consequences for the individuals involved and may discourage others from speaking up, allowing potential misconduct to go undetected. Potential negative impact POLITICAL ENGAGEMENT AND LOBBYING ACTIVITIES By lobbying and working for electrification of mobility and infrastructure development, among other things, Volvo Cars may have a positive impact on societal development. Actual positive impact MANAGEMENT OF RELATIONSHIPS WITH SUPPLIERS Positive impact on people and the environment by upholding high ethical standards wherever we conduct business and by setting requirements on environmental and social aspects in purchasing and procurement. Actual positive impact Extended payment terms or delayed payments can affect supplier’s financial situation and strain supplier relationships. Actual negative impact CORRUPTION AND BRIBERY Business operations in high-risk areas may contribute to an increased risk of incidents and corruption. Potential negative impact Risks of unethical behaviour may arise from operating in a global and com - plex value chain, particularly when conducting business in high-risk coun - tries with elevated corruption levels and weak regulatory enforcement. Risk  UPSTREAM    OWN OPERATIONS    DOWNSTREAM  SH ORT-TERM   MID-TERM    LONG-TERM OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 200 VOLVO CAR GROUP  / SUSTAINABILITY / GOVERNANCE INFORMATION ===== SIDA 201 ===== Business conduct governance The Compliance & Ethics (C&E) Office supports Volvo Cars to con- duct our business responsibly, ethically and in accordance with all relevant laws and regulations and our Code of Conduct. The C&E Office is led by the Global Head of C&E, who serves as the Chief Compliance & Ethics Officer for Volvo Cars. The Global Head of C&E reports to the General Counsel and Chief Corporate Affairs Officer and, to ensure independence, also has direct access to, and regu - larly reports to, the Audit Committee. The Global Head of C&E also ensures that compliance training is provided to the Board of Direc - tors. Annual compliance reporting is submitted to the Board of Directors, including the number of compliance cases and action taken. Cases that may cause severe impact to the company are highlighted for special attention. The Global Head of C&E reports on a quarterly basis, or more fre - quently if necessary, to the Compliance Committee, which consists of EMT and Head of Global Audit Office (GAO). This reporting includes implementation status and effectiveness of the C&E Pro - gram, key compliance risks, compliance cases and investigations, and progress on implementation and corrective actions plans. In addition, a China Compliance Committee has been established to serve as a governance body supporting effective implementation, oversight, and continuous improvement of the C&E Program in China. The C&E Office is comprised o f compliance officers, specialists and lawyer s responsible for all C&E risk areas. The teams are supported by a compliance champions network, which provides coordination, monitoring and support across the company. Regional C&E roles oversee the regional implementation and management of the C&E Program. The Data Protection Officer (DPO) is the desig - nated contact for all inquiries related to our data protection prac - tices. More information about our corporate governance can be found on page 43 and 140. Compliance & Ethics Program Our C&E Office supports responsible and ethical operations by developing and implementing the C&E Program. The program covers the compliance risk areas anti-corruption and bribery (including conflicts of interest), trade sanctions and export control, data pro - tection (including privacy and AI compliance governance), human rights, and competition law. The program demonstrates our commitment to ethical conduct, legal compliance and responsible business practices. Built on globally recognised principles, the pro - gram is structured around ten program elements and is continuously reviewed, updated and strengthened to address emerging risks and evolving stakeholder expectations. Our policies related to business conduct and corporate culture Our Code of Conduct reflects our values and culture, guiding how we achieve results in an ethical and responsible way. Our Code of Conduct and its twelve Corporate Policies reflect our dedication to responsible business practices. More information on the governance of the Code of Conduct and Corporate Policies can be found on page 142. Key policies in relation to Compliance & Ethics program Out of the twelve Corporate Policies, the following six key policies form a core component of our C&E Program and address our identi - fied impacts and risks related to corporate culture, including corrup - tion and bribery and how we protect whistleblowers. They reflect our dedication to responsible business practices and are further operationalised through corporate directives and guidelines, which provide clear and practical instructions for day-to-day implementa - tion. All policies and supporting materials are accessible internally through our intranet. • The Anti-Corruption Policy outlines our zero-tolerance stance on corruption and provides guidance on handling gifts and hospital - ity, lobbying and relationships with government officials. • The Conflict of Interest Policy reinforces our commitment to act with integrity and safeguard the company’s reputation at all times. COMPLIANCE & ETHICS – TEN PROGRAM ELEMENTS 1. TONE FROM THE TOP AND CULTURE 2. COMPLIANCE & ETHICS ORGANISATION 3. COMPLIANCE & ETHICS FRAMEWORK 4. TRAINING, AWARENESS AND COMMUNICATION 5. RISK ASSESSMENT Our leadership sets a strong ethical tone and actively fosters a culture of integrity, accountability, and transparency through - out the organisation. A dedicated function ensures effective govern - ance and oversees program implementation, supported by cross- functional collab - oration and senior leader - ship engagement. Our framework includes clear policies, directives, procedures, and controls designed to prevent, detect, and respond to compliance risks. Regular training and tar - geted communications ensure employees and business partners under - stand our standards and how to apply them in practice. We conduct regular com - pliance risk assessments to identify, evaluate, and pri - oritise risks, ensuring that our program is tailored to address key areas of exposure. 6. DUE DILIGENCE & DUE CARE 7. MONITORING AND AUDIT 8. INTERNAL REPORTING AND INVESTIGATIONS 9. ENFORCEMENT, DISCIPLINARY ACTIONS AND INCENTIVES 10. PROGRAM ASSESSMENT AND CON - TINUOUS IMPROVEMENT Risk-based due diligence is conducted on third parties and business partners, with ongoing due care applied to maintain ethical stand - ards and compliance over time. Continuous monitoring and periodic audits assess the effectiveness of our con - trols and ensure adherence to compliance require - ments. Confidential channels are available for employees and stakeholders to report concerns. All reports are promptly reviewed and, as appropriate, addressed through fair and independ - ent investigations. We enforce our standards consistently, maintaining a zero tolerance for retalia - tion, applying disciplinary measures for violations and encouraging ethical behav - iour through positive rein - forcement .   We regularly review and enhance our program to adapt to evolving risks, stakeholder expectations, and regulatory develop - ments. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 201 VOLVO CAR GROUP  / SUSTAINABILITY / GOVERNANCE INFORMATION ===== SIDA 202 ===== • The Data Protection Policy summarises the principles governing our processing of personal data. • The Competition Law Policy includes requirements related to situations that could impair fair competition. • The Trade Sanctions and Export Control Policy outlines the main principles and corresponding requirements for managing trade sanctions and export control risks. • The Internal Reporting Policy emphasises Volvo Cars’ zero- tolerance stance against retaliation against anyone who raises concerns in good faith. Our goals for ethical and responsible business are further cascaded to our business partners through our Code of Conduct for Business Partners. Corporate culture Culture is a shared responsibility for everyone at Volvo Cars. In order to fulfil our strategy of long-term value creation we need to think, act and lead differently together. Our culture principles: we keep it simple, we stay curious, and we are all-in, guide how we work as one team, while we keep learning and reduce complexity. It shapes how we fulfil our commitment to ethical and responsible business con - duct, and how we foster openness by encouraging employees to raise concerns through established channels, including our annual engagement survey. Insights from these interactions drives continu - ous improvement. Our ethical standards extend across our value chain through our Code of Conduct for Business Partners. Leadership culture Leadership is not built in frameworks or presentations, it is built in conversations, choices and everyday actions. Our leadership princi- ples: create clarity, lead with courage and take full ownership guides how leaders lead every day. It shapes how they act responsibly, step forward in uncertainty, and communicate clearly, to help create long-term value and fulfil our commitment to ethical and responsi - ble business conduct. Speak Up culture We encourage employees to speak up and address any unaccept - able behaviour or improper demands. Employees are expected to promptly raise compliance and ethical concerns, including any observed or suspected misconduct. We also encourage employees to report concerns to their line manager, local People Experience Cases reported to the C&E Office 2025 2024 Total number of cases reported to the C&E Office 274 227  of which transferred to other departments 151 117  of which remained at C&E Office 123 110   of which lack sufficient information 47 53   of which were substantiated 24 29    substantiated cases with disciplinary actions 10 22    substantiated cases related to corruption 4 9 Compliance & Ethics program risk management Working with the C&E Program, Volvo Cars adopts a risk-based approach to identify, assess, prioritise, and manage risks across anti-corruption, competition law, human rights, trade sanctions and export control, and data, privacy & AI compliance governance. Risk assessments are conducted and documented in accordance with the C&E framework. Depending on the maturity, prioritisation and nature of each risk area, we apply different assessment meth - odologies based on what is most appropriate at the time of review. Continuous monitoring is carried out to address risks identified during the assessment process, in investigations or in the handling of matters – driving ongoing improvements to compliance controls and processes. The key compliance risks, along with corresponding mitigation measures, are presented in the annual C&E Risk Report. The report is submitted to the Compliance Committee and the most significant compliance risks are also reported to the Board of Directors. To ensure alignment with broader enterprise risk governance, the key compliance risks are also reported to the ERM function. This supports enterprise-wide risk visibility, strategic decision-making and enables executive management to implement timely and appro - priate countermeasures. Further details on the ERM framework can be found in the Enterprise Risk Management section on page 37. Compliance & Ethics risk areas Anti-corruption including Conflict of interest Our commitment to responsible business is anchored in strong com - pany values and a culture of integrity. We believe that transparency, fairness and ethical conduct are fundamental to a sustainable econ - omy and a healthy society. Dishonest business practices contribute to inequality, weaken trust in systems of governance and hinder function, another senior manager, the Legal department or the C&E Office. Additionally, employees can raise concerns or seek guidance confidentially via our dedicated whistleblowing channel, the Tell Us reporting line. Tell Us is operated by an independent third-party provider in accordance with the EU Whistleblowing Directive. We are committed to open communication, and, where permitted by local law, individuals also have the option to report concerns anony - mously. External stakeholders, such as customers and business partners across our value chain, can also use the Tell Us reporting line to raise concerns and submit reports. Rightsholders (such as indigenous people) or organisations representing them can use Tell Us to anony- mously report potential human rights abuses. Tell Us is available globally, in over 75 languages. Protection of whistleblowers We are committed to fostering a culture where whistleblowers feel confident and empowered to ask questions and raise concerns with - out fear of retaliation. This is key to preventing issues and ensuring they are addressed appropriately when they arise. We take all reports seriously and are committed to maintaining confidentiality throughout the investigation process. Volvo Cars does not tolerate any form of retaliation against individuals who report their concerns in good faith. Failing to protect whistleblowers could have serious consequences for the individuals involved and may discourage others from speaking up, allowing potential misconduct to go undetected. Investigations and disciplinary action All reports made via the Tell Us reporting line are received by the Compliance Investigations teams in the C&E Office. The team consists of a few highly qualified professionals and treat all the information they receive confidentially and handle reports promptly, independently and objectively, in accordance with our compliance investigation procedure and relevant regulatory requirements. Additionally, in 2025 we developed a remediation process to provide a structured approach for delivering or contributing to remedies when we have directly or indirectly caused or contributed to material negative impacts within the human rights area. The table provides a summary of cases reported to the C&E Office in 2025. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 202 VOLVO CAR GROUP  / SUSTAINABILITY / GOVERNANCE INFORMATION ===== SIDA 203 ===== economic development. It can also compromise democratic systems and expose Volvo Cars to legal, financial and reputational risks. Therefore, we uphold a strict zero-tolerance policy toward corrup - tion in all its forms and actively promote a culture of honesty, accountability and ethical behaviour across our operations and value chain. Conflicts of interest may affect our ability to make objective and transparent decisions, potentially impacting Volvo Cars’ reputation and performance. We are committed to acting with integrity and safeguarding our reputation at all times. Employees are expected to ensure that all professional decisions related to our business are made in the best interests of the company. Our Conflict of Interest Policy sets out the requirements and provides guidance to help employees identify, disclose and appropriately manage potential conflicts of interest. Competition law Volvo Cars is committed to fair competition and compliance with applicable competition laws. Employees who engage with business partners or competitors in the course of their work are expected to follow the principles outlined in our Competition Law Policy and related directives. These provide clear guidance and targeted train - ing to help employees understand their obligations and act appro - priately when interacting with business partners and competitors. Human rights We seek to safeguard human rights throughout our value chain. Our human rights compliance program aims to prevent, identify and mitigate adverse impacts on human rights. The C&E Office supports our whole value chain with guidelines and processes, risk assess - ments, trainings and monitoring. More information about our human rights due diligence can be found on page 143 and 191. Trade sanctions and export control compliance Volvo Cars is committed to comply with all applicable trade sanc - tions and export control laws and regulations and maintains policies designed and reasonably expected to continue to ensure compli - ance with those laws and regulations. These policies summarise applicable principles and provide specific instructions and guidance regarding compliance, including risk-based due diligence of third parties and contractual safeguards, and are periodically reviewed and updated to enhance their effectiveness. Data, privacy & AI compliance governance At Volvo Cars, protecting personal data is not just a legal requirement – it is a core element of our responsible business conduct, which in turn is a key part of how we build trust with our stakeholders. We apply our Data Protection Policy, directives, controls and training to uphold the integrity, security and transparency of personal data belonging to our stakeholders. These measures are overseen by ded- icated governance structures that monitor compliance, mitigate risks and drive continuous improvement across our value chain. In the same way, we recognise the importance of responsible innovation in emerging technologies such as AI. Our AI compliance governance framework embeds ethical principles, compliance requirements and accountability to ensure our AI systems promote explainable, personal, sustainable and safe use of AI while minimis - ing potential harm. Through this commitment, we reinforce our role as a responsible and trusted partner. We are committed to transparency and accountability in the way we manage personal data. Our privacy notices explain the types of information we collect, the purposes for which it is used, and the period for which it is retained. Cybersecurity At Volvo Cars, cybersecurity is a cornerstone of our commitment to safety, innovation and trust. As our cars and operations become increasingly connected and data-driven, protecting our digital assets, systems and people from cyber threats is more critical than ever. To safeguard the company against internal and external threats, our international team of cybersecurity specialists operates 24/7 across geographies and disciplines. We continuously monitor, assess and respond to evolving threats and risks, to ensure that our digital infrastructure remains resilient, secure and aligned with global best practices. We believe that cybersecurity is not just a technical challenge, it is a cultural one. Through targeted training programmes, simulations and continuous communication, we empower our workforce to rec - ognise and respond to potential threats. Guided by our cybersecu - rity framework, these initiatives foster a proactive security mindset and help embed cybersecurity into everyday decision-making across the organisation. Cybersecurity is integrated into our development lifecycle, ensur - ing that our cars and digital services are designed with security in mind from the outset. This includes secure software development practices, rigorous testing, and compliance with industry standards and regulations. We recognise the importance of collaborative cybersecurity across our supply chain. As part of our sourcing and procurement processes, we require our business partners to adhere to stringent best industry cybersecurity standards and practices. These require - ments are designed with a balanced, risk-based approach to ensure that our extended ecosystem is resilient to disruptions. Regular assessments and dialogue with suppliers help us identify vulnerabil - ities early and promote continuous improvement. DATA PRIVACY CUSTOMERS EMPLOYEES VALUE CHAIN As digitalisation continues to transform our industry, we aim to combine data-driven innova - tion with respect for the fundamental right to privacy. Data helps us better understand con - sumer needs, enhance services, and develop new products. At the same time, we remain committed in safeguarding personal information and upholding data protection standards. Our commitment to protecting personal data extends to our employees. We collect and pro - cess employee information with care and in compliance with applicable privacy, data pro - tection, and labour laws. Our Code of Conduct for Business Partners requires suppliers to comply with relevant data protection legislation. (More information on our Code of Conduct for Business Partners can be found on page 142). OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 203 VOLVO CAR GROUP  / SUSTAINABILITY / GOVERNANCE INFORMATION ===== SIDA 204 ===== Our actions Prevention and detection of corruption and bribery At Volvo Cars, we manage anti-corruption as an integral part of our compliance program. Our Anti-Corruption Policy and Directive out - line the framework for preventing and detecting bribery and corrup - tion across our operations and among third parties. The key elements of our anti-corruption program include: • Company-wide and targeted risk assessments • Guidance and procedures for handling situations where red flags arise • Training courses and regular communications from top manage - ment to reinforce our zero-tolerance policy regarding corruption • Risk-based due diligence for business partners, charitable contributions and sponsorships Functions with higher exposure, identified through corruption risk mapping, receive mandatory, targeted training. Such functions-at- risk, including Public Affairs, Regulatory Affairs, Executive Manage - ment as well as employees interacting with government, are covered by the training program, where employees receive and complete mandatory anti-corruption training through annual Code of Conduct e-learning, as well as risk-specific anti-corruption and anti-bribery training. In 2025, ten operations were selected for anti-corruption risk assessments, with mitigating measures to be implemented where necessary. In addition, we foster a strong Speak Up culture. Our whistleblow - ing channel, the Tell Us reporting line, is available to both employees (via the intranet) and external stakeholders (via our company website). As part of our detection measures, we conduct ongoing monitoring to safeguard compliance within our operations and value chain. Furthermore, the Compliance Investigation Unit and the Global Audit Office carry out investigations and audits, and, where required, recommend and monitor corrective actions. Our actions aim to prevent, detect, and respond to identified cases of corruption and bribery. This is an ongoing effort, and it is challenging to set targets and measure progress, as fewer reported cases do not necessarily mean fewer actual cases. We monitor and act on reported incidents, and we also provide training to raise awareness among our employees and within our value chain to improve the completeness of reporting. In 2025 no legal proceedings related to corruption were initiated against Volvo Cars or any of its employees, and there were no con - victions for violations of anti-corruption or anti-bribery laws, and no related fines. Compliance & Ethics training, awareness and communication We provide training and communication to ensure that our employ - ees and business partners understand, follow and act according to our ethical and responsible business conduct. We develop trainings to both all our employees and managers, as well as region- or role specific groups. We also provide targeted risk trainings to functions identified as being exposed to specific compliance risks. The impact of the trainings is measured through employee surveys, compliance case statistics, training completion rates and similar KPIs, and is reported as part of the C&E Program status reports. Examples of trainings performed 2025 include: • Mandatory Code of Conduct e-learning course for all non-pro - duction employees, focused on anti-corruption, competition law and Speak Up culture. This training was also provided to all mem - bers of the Board of Directors. In addition, we provided targeted trainings to leadership in responsible business conduct. • Compliance & Ethics modules in our internal leadership programs. • A responsible business discussion kit, focused on conflicts of interest, that helps leaders initiate responsible business discus - sions with their teams. • Targeted training on the previously mentioned Compliance & Ethics risk areas, training more than 7,500 people. • Held a “Compliance Awareness Day” for the procurement func - tion with focus on Data Protection, Trade sanctions & export control and Anti-corruption risk areas. • Targeted trainings in our Anti-Corruption Policy to ‘at risk employees‘. During 2025, the share of employees who completed the Code of Conduct training decreased slightly. In 2026, the mandatory Code of Conduct training will be included as a performance target assigned to individual employees in the global people performance tool, which is expected to drive an increase in completion rates across the organisation. Data protection incidents 2025 2024 Substantiated privacy complaints addressed by the DPO 7 6 Data protection authority investigations managed by the DPO 1 6 Substantiated personal data incidents 58 71 Training and Communication 2025 2024 Employees (non-production) trained in our Code of Conduct, % 88 90 Number of production sites where employees (production) were trained in our Code of Conduct 4 4 Number of employees having received targeted (‘face-to-face’) compliance training 7,741 10,541 Functions-at-risk covered by anti-corruption training programmes, % 100 — Corruption and bribery incidents 2025 2024 Convictions for violation of anti-corruption and anti-bribery laws — — Amount of fines for violation of anti-corruption and anti-bribery laws, SEK — — OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 204 VOLVO CAR GROUP  / SUSTAINABILITY / GOVERNANCE INFORMATION ===== SIDA 205 ===== Management of relationships with suppliers including payment practices Volvo Cars views supplier relationships as long-term partnerships built on transparency, shared values and continuous improvement. Our Code of Conduct for Business Partners forms an integral part of the agreements we make with our suppliers and other business partners. The company’s approach includes: • Collaborative engagement: For example, in business review meetings with our suppliers, we strive to co-develop and enhance our relationship and performance across multiple areas, including sustainability. • Risk based due diligence approach to supplier selection: When evaluating new suppliers for direct material sourcing, we assess the following social and environmental criteria: – Human rights and labour practices: Suppliers must comply with our Code of Conduct for Business Partners. – Environmental impact: Suppliers are evaluated on their envi - ronmental impact including carbon footprint, water usage, waste management and biodiversity impact. – Raw Materials of Concern (RMoC): Special attention is given to suppliers of high-risk materials such as cobalt, lithium and rare earth elements. – Proactive risk monitoring: We continuously monitor supply chain risks – such as financial and sustainability risks, particu - larly in conflict-affected and high-risk areas – using both internal assessments and third-party data. – Corrective action and escalation: If a supplier is found to be non-compliant with Volvo Cars’ sustainability standards, a structured process is initiated, including engagement, remedia - tion plans and, if necessary, termination of the relationship. Supplier relations and payment terms are intertwined, as payment terms are crucial for strong supplier partnerships. Our standard contract payment terms are 60 days month end (production mate - rial) or net (other). Other payment terms could be agreed upon depending on certain set-ups, financial situation and depending on types of goods and shipment time. We also provide the possibility for suppliers to be part of our Supply Chain Finance Programme (factoring) that helps free cash for suppliers. Considering all this, payment rate is above 91 (93) per cent and the average number of days on which we pay our suppliers amounts to 68 (72) days, calculated as the days payable outstanding (DPO). Previously, we have signed an agreement with the Swedish Initia - tive for Payment Terms, in compliance with government recommen - dations to shorten supplier payment times in domestic trade suppli - ers with a focus on small and medium-sized enterprises. At the end of 2025, there were no known material outstanding legal proceedings for late payments raised for management’s attention. Policy influence and advocacy We actively support policy development and advocate positive change in a wide range of areas. In collaboration with our stakehold - ers, through public advocacy and participation in trade associations, we promote: • Climate action that accelerates the transition to a low-carbon economy. • Circularity in the automotive sector. • Electrification in the automotive industry by improving charging networks, accelerating decarbonisation, expanding climate- neutral energy provision and enabling smart and bi-directional charging. • Safe digital transformation in our sector through policy that enables technological development, including the international transfer of non-personal product data. • Free trade agreements that solidify and diversify supply chains and ensure fair competition. • Open and collaborative research and development that supports reskilling and upskilling automotive workers. • International human rights standards and guidelines. Volvo Cars does not make financial contributions to political parties. In accordance with our Anti-Corruption Policy, we do not use com - pany assets for political influence. Although not legally obliged, we are voluntary members of trade associations and organisations that engage in policy influence and advocacy. In 2025, total annual contributions to those organisations amounted to SEK 14.5 (20.5) m. Some of the largest recipient organisations include the Alliance for Automotive Innovation, E-Mobility Europe, Mobility Sweden and the Society of Motor Manufacturers and Traders. No members of the Board of Directors or EMT have held roles in public administration or regulatory bodies during the two years preceding the 2025 reporting period. The EMT oversees the compa - ny’s policy engagement and lobbying activities, including business ethics and legal compliance. To read more about our lobbying activities, consult the EU Transparency Register, under registration number 74574295642-60. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 205 VOLVO CAR GROUP  / SUSTAINABILITY / GOVERNANCE INFORMATION ===== SIDA 206 ===== Other information Restatements PAGE 207–208 Index of ESRS Disclosure Requirements PAGE 209–210 List of datapoints that derive from other EU legislation PAGE 211–212 Statement on due diligence PAGE 213 Auditor’s limited assurance report on Volvo Cars’ statutory Sustainability Statement PAGE 214–215 Volvo Cars and the UN Sustainable Development Goals PAGE 216 Green Financing Report PAGE 217–218 Auditor’s limited assurance report on Volvo Cars’ Green Financing Report PAGE 219 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 206 VOLVO CAR GROUP  / SUSTAINABILITY ===== SIDA 207 ===== Restatements General Compared with previous year’s report, updates to the reporting scope and underlying data capabilities have been implemented. These changes require corresponding adjustments to historical fig - ures to ensure comparability across periods. In addition, identified inaccuracies in prior years have been corrected and the historical data has been updated accordingly. The base year values for 2018 and 2019, which serve as the foundation for measuring progress toward our 2025 and 2030 ambitions, have been updated accord - ingly. Enhanced data model This year, we advanced our data capabilities to more precisely cal - culate the emissions from materials and share of recycled materials in our cars. The data model connects the detailed material composi - tion of every part that makes up every Volvo to more precise generic and supplier specific data. This allows for a more detailed material breakdown for each part in each Volvo car produced, and enables the application of CO 2 claims on materials. Scope 3 greenhouse gas emissions Waste generated in operations Due to multiple disposal routes of waste, a material amount of non-hazardous waste was not reported during 2024. The metric has been updated to reflect actual disposal volumes. Additionally, emission factors applied to waste historically have been corrected due to errors in published datasets from UK DEFRA. The updated emission factors have been applied retrospectively to reflect a true and fair view of the greenhouse gas emissions related to waste generated in operations. Purchased goods & services, use of sold products and end-of-life treatment Historical numbers reported in the category Purchased Goods & Services have been updated with more precise data. Vehicle dependent categories, including Purchased Goods & Services and Use of Sold Products have been recalculated to align with the updated number of produced vehicles in historical years. Disaggre - gation of use of sold products is updated accordingly. Downstream leased assets Emissions previously reported in this category have been recatego - rized and accounted for in Scope 3 category 1 purchased goods & services. Franchises Improved methodology for collecting and compiling data from thou - sands of retailers have resulted in an adjustment of reported values. 2025 and 2030 ambitions The ambition to reduce tailpipe emissions and Scope 3 SBTi target have been recalculated to account for updates in the category Use of Sold Products. The ambition to minimise emissions from materi - als has been recalculated to account for updates in the category Purchased Goods & Services. The ambition to reduce operational emissions has been recalculated to account for changes in the cate - gories waste generated in operations, downstream leased assets and franchises. The overarching ambitions to reduce emissions per car and to reach net zero greenhouse gas emissions across the value chain have been recalculated to account for changes to absolute emissions in historical years. All of above have been recalculated to account for the updated number of produced cars per year. Recycled and bio-based materials and total materials in fleet As a result of the enhanced data model, data reported for 2024 have been adjusted to more accurately reflect the share of recycled and bio-based materials in new models as well as in our fleet. It has also resulted in an updated amount for the metric total materials in fleet. Own workforce characteristics During 2025, the employee data collection process was strength - ened to ensure completeness of all entities within Volvo Cars, and alignment with the scope of consolidation. This scope includes those entities excluded from the central HR system. The resulting variance in headcount for 2024 is approximately 3,000 employees and 560 non-employees. Comparative figures have not been restated for any metrics within own workforce due to this scope, as historical data for these entities was not collected in prior periods and cannot be reconstructed retrospectively with sufficient accu - racy and completeness. In 2024, the reported number for non-employees (consultants) was 9,665. However, this number included 4,766 consultants who, according to our ESRS-aligned definition, do not fall within the non-employee category. Comparative figures have been restated. Definitions of non-employees applied in this statement can be found on page 187. Gender distribution in management In 2025, we implemented a global job framework that redefined the classification of senior leaders, introducing a more competence - based and transparent model. The new classification of senior lead - ers resulted in an updated breakdown of gender and age for women and men in senior leadership, as well as the overall totals. Compara - tive figures have been updated accordingly in the table presented on page 186. In addition, the comparative figures for the entity-specific disclosure women in leading position has been updated. The restate - ments are disclosed on an aggregated level in the table below. Performance and development reviews In 2024, the share of employees participating in regular perfor - mance and development reviews was determined based on the annual merit review process. To align with ESRS, the metrics are prepared using information from our Continuous Dialogue process, our formal framework for ongoing performance and development reviews. This methodology shift reflects a broader scope, as it now goes beyond the merit review process and now also include formal development dialogues for all participating employees. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 207 VOLVO CAR GROUP  / SUSTAINABILITY / OTHER INFORMATION ===== SIDA 208 ===== After restatement Prior to restatement 2024 2018 2024 2018 Greenhouse gas emissions, tonnes CO 2 Purchased goods and services 11,019,000 9,793,000 14,363,000 10,435,000 Waste generated in operations 3,000 3,000 5,000 9,000 Use of sold products 24,387,000 29,583,000 24,390,000 29,650,000 Downstream leased assets 0 0 4,000 4,000 Franchises 379,000 748,000 385,000 747,000 GHG emission reduction ambitions 1) Reduce CO 2 emissions across the value chain 10 41,870,000 4 42,589,000 Reduce CO 2 emissions per car 32 36,002,000 26 36,724,000 Reduce tailpipe emissions per car 46 23,715,000 46 23,785,000 Reduce emissions from materials per car 1 9,793,000 –21 10,435,000 Reduce operational emissions per car 25 2,494,000 24 2,504,000 Science Based Targets initiative 1) 2) Reduce scope 3 emissions from use of sold products 26 30,743,000 26 30,694,000 Resource inflow and outflow Recycled and bio-based materials in new models, % 18 — 15 — Recycled and bio-based materials in fleet, % 20 — 10 — Total material in fleet, kilo tonnes 1,465 — 1,470 — Total waste generated, tonnes 222,061 — 208,196 — whereof metal, tonnes 148,308 — 134,515 — Non-hazardous waste directed to recycling, tonnes 197,263 — 183,404 — Own workforce characteristics, headcount Non-employees 4,899 — 9,665 — Gender distribution in management, % Women in senior leadership 29.7 — 31.1 — Men in senior leadership 70.3 — 68.9 — Women in leading positions 30.8 — 30.9 — Performance and development reviews, % White collars 96 — 100 — Women 95 — 100 — Men 96 — 100 — 1) The 2018 figure represents the base year value in tonnes of CO 2. The 2024 figure shows the percentage change relative to the base year. 2) The 2018 column reflects the Science Based Targets initiative base year, representing 2019 data. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 208 VOLVO CAR GROUP  / SUSTAINABILITY / OTHER INFORMATION ===== SIDA 209 ===== Index of ESRS Disclosure Requirements Disclosure Requirement Description ESRS 2 GENERAL DISCLOSURES Page BP-1 General basis for preparation of the Sustainability Statement 133 BP-2 Disclosures in relation to specific circumstances 133 GOV-1 The role of the administrative, management and supervisory bodies 140 GOV-2 Information provided to and sustainability matters addressed by the undertaking's administrative, management and supervisory bodies 140 GOV-3 Integration of sustainability-related performance in incentive schemes 143 GOV-4 Statement on due diligence 213 GOV-5 Risk management and internal controls over sustainability reporting 141 SBM-1 Strategy, business model and value chain 134 SBM-2 Interests and views of stakeholders 138 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model 134, 145 IRO-1 Description of the process to identify and assess material impacts, risks and opportunities 145 IRO-2 Disclosure Requirements in ESRS covered by the undertaking's Sustainability Statement 147 ESRS E1 CLIMATE CHANGE Page E1-1 Transition plan for climate change mitigation 154 E1-2 Policies related to climate change mitigation and adaption 155 E1-3 Actions and resources in relation to climate change policies 156 E1-4 Targets related to climate change mitigation and adaptation 158 E1-5 Energy consumption and mix 161 E1-6 Gross Scopes 1, 2, 3 and Total GHG emissions 159 E1-7 GHG removals and GHG mitigation projects financed through carbon credits Not applicable E1-8 Internal carbon pricing 158 E1-9 Anticipated financial effects from material physical and transition risks and potential climate-related opportunities Phase-in Entity-specific Electrified car retail sales 156 Entity-specific Regional efficiency metrics 157 ESRS E2 POLLUTION Page E2-1 Policies related to pollution 165 E2-2 Actions and resources related to pollution 165 E2-3 Targets related to pollution 166 E2-4 Pollution of air, water and soil 165 E2-5 Substances of concern and substances of very high concern 165 E2-6 Anticipated financial effects from pollution-related risks and opportunities Phase-in Disclosure Requirement Description ESRS E3 WATER AND MARINE RESOURCES Page E3-1 Policies related to water and marine resources 168 E3-2 Actions and resources related to water and marine resources 168 E3-3 Targets related to water and marine resources 169 E3-4 Water consumption 168 E3-5 Anticipated financial effects from water and marine resources-related risks and opportunities Phase-in ESRS E4 BIODIVERSITY AND ECOSYSTEMS Page E4-1 Transition plan and consideration of biodiversity and ecosystems in strategy and business model Phase-in E4-2 Policies related to biodiversity and ecosystems 171 E4-3 Actions and resources related to biodiversity and ecosystems 171 E4-4 Targets related to biodiversity and ecosystems 172 E4-5 Impact metrics related to biodiversity and ecosystems 171 E4-6 Anticipated financial effects from biodiversity and ecosystem-related risks and opportunities Phase-in Entity-specific Estimated impact on biodiversity from Volvo Cars’ value chain, species.year 171 ESRS E5 RESOURCE USE AND CIRCULAR ECONOMY Page E5-1 Policies related to resource us and circular economy 174 E5-2 Actions and resources related to resource us and circular economy 175 E5-3 Targets related to resource us and circular economy 176 E5-4 Resource inflows 176 E5-5 Resource outflows 177 E5-6 Anticipated financial effects from material resource use and circular economy-related risks and opportunities Phase-in Entity-specific Component value retention 177 Entity-specific Material breakdown in fleet 177 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 209 VOLVO CAR GROUP  / SUSTAINABILITY / OTHER INFORMATION ===== SIDA 210 ===== Disclosure Requirement Description ESRS S1 OWN WORKFORCE Page S1-1 Policies related to own workforce 182 S1-2 Processes for engaging with own workers and workers' representatives about impacts 182 S1-3 Processes to remediate negative impacts and channels for own workers to raise concerns 183 S1-4 Taking action on material impacts and approaches to mitigating material risks and pursu - ing material opportunities related to own workforce, and effectiveness of those actions and approaches 183 S1-5 Targets related to managing material impacts, advancing positive impacts, and managing risks and opportunities 186 S1-6 Characteristics of the undertaking’s employees 181 S 1-7 Characteristics of non-employee workers in the undertaking’s own workforce 181 S1-8 Collective bargaining coverage and social dialogue 184 S1-9 Diversity metrics 185 S1-10 Adequate wages 185 S1-11 Social protection 184 S1-13 Training and skills development metrics 185 S1-14 Health and safety metrics 184 S1-15 Work-life balance metrics 184 S1-16 Remuneration metrics 185 S1-17 Incidents, complaints and severe human rights impacts 186 Entity-specific Employee survey results 182 Entity-specific Performance and career development reviews 185 Entity-specific Women in management 186 ESRS S2 WORKERS IN THE VALUE CHAIN Page S2-1 Policies related to value chain workers 190 S2-2 Processes for engaging with value chain workers about impacts 190 S2-3 Processes to remediate negative impacts and channels for value chain workers to raise concerns 190 S2-4 Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions 191 S2-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities 194 Entity-specific SAQ compliant suppliers 191 Entity-specific Audits 193 Entity-specific RMAP compliant smelters 193 Index of ESRS Disclosure Requirements, continued. Disclosure Requirement Description ESRS S4 CONSUMERS AND END-USERS Page S4-1 Policies related to consumers and end-users 196, 197 S4-2 Processes for engaging with consumers and end-users about impacts 196, 197 S4-3 Processes to remediate negative impacts and channels for consumers and end-users to raise concerns 196, 202 S4-4 Taking action on material impacts on consumers and end-users, and approaches to managing material risks and pursuing material opportunities related to consumers and end-users, and effectiveness of those actions 197, 198 S4-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities 197, 198 ESRS G1 BUSINESS CONDUCT Page G1-1 Business conduct policies and corporate culture 201 G1-2 Management of relationships with suppliers 205 G1-3 Prevention and detection of corruption and bribery 204 G1-4 Incidents of corruption or bribery 204 G1-5 Political influence and lobbying activities 205 G1-6 Payment practices 205 Entity-specific Cases reported to the C&E Office 202 Entity-specific Competition law and data protection incidents 204 Entity-specific Training and Communication (in addition to Disclosure Requirement G1-3 §21 b) 204 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 210 VOLVO CAR GROUP  / SUSTAINABILITY / OTHER INFORMATION ===== SIDA 211 ===== List of datapoints that derive from other EU legislation ESRS Disclosure Requirement Data point Description SFDR Pillar 3 Benchmark Regulation Climate Law Page ESRS 2: General disclosures GOV-1 21 (d) Board's gender diversity x x 140 GOV-1 21 (e) Percentage of board members who are independent x 140 GOV-1 30 Statement on due diligence x 213 SBM-1 40 (d) i Involvement in activities related to fossil fuel activities x x x Not applicable SBM-1 40 (d) ii Involvement in activities related to chemical production x x Not applicable SBM-1 40 (d) iii Involvement in activities related to controversial weapons x x Not applicable SBM-1 40 (d) iiv Involvement in activities related to cultivation and production of tobacco x Not applicable ESRS E1: Climate Change ESRS E1-1 14 Transition plan to reach climate neutrality by 2050 x 154 ESRS E1-1 16 (g) Undertakings excluded from Paris-aligned Benchmarks x x 155 ESRS E1-4 34 GHG emission reduction targets x x x 158 ESRS E1-5 37 Energy consumption and mix x 161 ESRS E1-5 38 Energy consumption from fossil sources disaggregated by sources (only high climate impact sectors) x 161 ESRS E1-5 40–43 Energy intensity associated with activities in high climate impact sectors x 161 ESRS E1-6 44 Gross Scope 1, 2, 3 and Total GHG emissions x x x 159 ESRS E1-6 53–55 Gross GHG emissions intensity x x x 159 E S R S E1-7 56 GHG removals and carbon credits x Not applicable ESRS E1-9 66 Exposure of the benchmark portfolio to climate-related physical risks x Phase-in ESRS E1-9 66 (a); 66 (c) Disaggregation of monetary amounts by acute and chronic physical and Location of significant assets at material physical risk x Phase-in ESRS E1-9 67 (c) Breakdown of the carrying value of its real estate assets by energy-efficiency classes x Phase-in ESRS E1-9 69 Degree of exposure of the portfolio to climate-related opportunities x Phase-in ESRS E2: Pollution ESRS E2-4 28 Amount of each pollutant listed in Annex II of the EPRTR Regulation (European Pollutant Release and Transfer Register) emitted to air, water and soil, x 165 ESRS E3: Water and marine resources ESRS E3-1 9 Water and marine resources x 168 ESRS E3-1 13 Dedicated policy x Not applicable ESRS E3-1 14 Sustainable oceans and seas x Not applicable ESRS E3-4 28 (c) Total water recycled and reused x 168 ESRS E3-4 29 Total water consumption in m 3 per net revenue on own operations x 168 ESRS E4: Biodiversity and ecosystems ESRS 2 - SBM-3 - E4 16 (a) i x 172 ESRS 2 - SBM-3 - E4 16 (b) x 172 ESRS 2 - SBM-3 - E4 16 (c) x 172 ESR E4-2 24 (b) Sustainable land / agriculture practices or policies x Not applicable ESRS E4-2 24 (c) Sustainable oceans / seas practices or policies x Not applicable ESRS E4-2 24 (d) Policies to address deforestation x 171 ESRS E5: Resource use and circular economy ESRS E5-5 37 (d) Non-recycled waste x 178 ESRS E5-5 39 Hazardous waste and radioactive waste x 178 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 211 VOLVO CAR GROUP  / SUSTAINABILITY / OTHER INFORMATION ===== SIDA 212 ===== ESRS Disclosure Requirement Data point Description SFDR Pillar 3 Benchmark Regulation Climate Law Page ESRS S1: Own workforce ESRS 2 - SBM-3 - S1 14 (f) Risk of incidents of forced labour x 181 ESRS 2 - SBM-3 - S1 14 (g) Risk of incidents of child labour x 181 ESRS S1-1 20 Human rights policy commitments x 182 ESRS S1-1 21 Due diligence policies on issues addressed by the fundamental International Labor Organization Conventions 1 to 8 x 182 ESRS S1-1 22 Processes and measures for preventing trafficking in human beings x 182 ESRS S1-1 23 Workplace accident prevention policy or management system x 182 ESRS S1-3 32 (c) Grievance/complaints handling mechanisms x 183 ESRS S1-14 88 (b) and (c) Number of fatalities and number and rate of work-related accidents x x 184 ESRS S1-14 88 (e) Number of days lost to injuries, accidents, fatalities or illness x 184 ESRS S1-16 97 (a) Unadjusted gender pay gap x x 185 ESRS S1-16 97 (b) Excessive CEO pay ratio x 185 ESRS S1-17 103 (a) Incidents of discrimination x 186 ESRS S1-17 104 (a) Non-respect of UNGPs on Business and Human Rights and OECD x x 186 ESRS S2: Workers in the value chain ESRS 2 - SBM-3 - S2 11 (b) Significant risk of child labour or forced labour in the value chain x 190 ESRS S2-1 17 Human rights policy commitments x 190 ESRS S2-1 18 Policies related to value chain workers x 190 ESRS S2-1 19 Non-respect of UNGPs on Business and Human Rights principles and OECD guidelines x x 143 ESRS S2-1 19 Due diligence policies on issues addressed by the fundamental International Labor Organization Conventions 1 to 8 x 143 ESRS S2-4 36 Human rights issues and incidents connected to its upstream and downstream value chain x 191 ESRS S3: Affected communities ESRS S3-1 16 Human rights policy commitments x Not material ESRS S3-1 17 Non-respect of UNGPs on Business and Human Rights, ILO principles or and OECD guidelines x x Not material ESRS S3-4 36 Human rights issues and incidents x Not material ESRS S4: Consumers and end-users ESRS S4-1 16 Policies related to consumers and end-users x 196, 197 ESRS S4-1 17 Non-respect of UNGPs on Business and Human Rights and OECD guidelines x x 143 ESRS S4-4 35 Human rights issues and incidents x 196 ESRS G1: Business conduct ESRS G1-1 10 (b) United Nations Convention against Corruption x Not applicable ESRS G1-1 10 (d) Protection of whistleblowers x Not applicable ESRS G1-4 24 (a) Fines for violation of anti-corruption and anti-bribery laws x x 204 ESRS G1-4 24 (b) Standards of anti-corruption and anti-bribery x 204 List of datapoints that derive from other EU legislation, continued. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 212 VOLVO CAR GROUP  / SUSTAINABILITY / OTHER INFORMATION ===== SIDA 213 ===== Statement on due diligence Our due diligence process in described on page 143. In line with ESRS 2 GOV-4, the table below provides a mapping of how and where the main aspects and steps of the due diligence process are reflected within the Sustainability Statement for each relevant standard. Core elements of due diligence Section in the Sustainability Statement Page reference a) Embedding due diligence in governance, strategy and business model Information on how we integrate due diligence into our govern - ance model and strategic framework as well as as how our due diligence processes inform the materiality assessment is pre - sented in the Strategy, business model and value chain, Sustain - ability governance and Materiality assessment section 133, 143–144, 145–147 b) engaging with affected stakeholders Details on our engagement with affected stakeholders, and how these interactions inform our materiality assessment, are pre - sented in the Stakeholder engagement and Materiality assess - ment section 138, 145–147 c) identifying and assessing negative impacts on people and the environment Our methodology to identify and assess negative impacts is described in the Materiality assessment section. The material impacts are summarised in the Environmental, Social and Governance section. 145–147, 153, 164, 167, 170, 173, 180, 189, 195, 200 d) taking action to address negative impacts on people and the environment The negative impacts on people and the environment are addressed with actions. These are disclosed in the Environmen - tal, Social and Governance section 156, 165, 168, 171, 175, 183, 191, 197, 204 e) tracking effectiveness of these efforts The effectiveness of actions is tracked using key sustainability metrics. These are included in the Environmental, Social and Governance section. 160, 165, 168, 171, 176, 184–186, 193, 198, 204 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 213 VOLVO CAR GROUP  / SUSTAINABILITY / OTHER INFORMATION ===== SIDA 214 ===== Auditor’s limited assurance report of Volvo Cars’ statutory sustainability statement This auditor’s report is a translation of the Swedish language original. In the events of any differences between this translation and the Swedish original the latter shall prevail. To the general meeting of the shareholders of Volvo Car AB (publ), corporate identity number 556810-8988 Conclusion We have conducted a limited assurance engagement of the sustain - ability statement for Volvo Car AB (publ) (“Volvo Cars”) for the financial year 2025. The sustainability statement is included on pages 130–213 in this document. Based on our limited assurance engagement as described in the section Auditor’s responsibility, nothing has come to our attention that causes us to believe that the sustainability statement does not, in all material respects, meet the requirements of the Swedish Annual Accounts Act which includes, • whether the sustainability statement meets the requirements of the European Sustainability Reporting Standards (ESRS), • whether the process the company has carried out to identify reported sustainability information has been conducted as described in the sustainability statement, • compliance with the reporting requirements of the EU’s Green Taxonomy Regulation Article 8 (EU Taxonomy) Basis for conclusion We have conducted the limited assurance engagement in accord - ance with FAR’s recommendation RevR 19 Revisorns översiktliga granskning av den lagstadgade hållbarhetsrapporten . Our responsi- bility according to this recommendation is further described in the section Auditor’s responsibility. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. Other information than the sustainability statement This document also contains other information than the sustainabil - ity statement and is found on pages 1–126, 216–218 and 220–227. The Board of Directors and the Chief Executive Officer are responsi - ble for this other information. Our conclusion on the sustainability statement does not cover this other information and we do not express any form of assurance conclusion regarding this other information. In connection with our limited assurance engagement on the sustainability statement, our responsibility is to read the information identified above and consider whether the information is materially inconsistent with the sustainability statement. In this procedure we also take into account our knowledge otherwise obtained in the limited assurance engagement and assess whether the information otherwise appears to be materially misstated. If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other infor - mation, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Board of Directors and the Chief Executive Officer The Board of Directors and the Chief Executive Officer are responsi - ble for the preparation of sustainability statement in accordance with Chapter 6, paragraphs 12–12f of the Swedish Annual Accounts Act, and for such internal control as they determines is necessary to enable the preparation of the sustainability statement that is free from material misstatements, whether due to fraud or error. Other matters Prior year’s sustainability statement has not been subject to limited assurance procedures in accordance with FAR’s recommendation RevR 19 and consequently prior year’s information in the sustaina - bility statement for 2025 has not been subject to limited assurance procedures in accordance with that recommendation. Auditor’s responsibility Our responsibility is to express a conclusion on whether the sustain - ability statement has been prepared in accordance with Chapter 6, Sections 12–12f of the Swedish Annual Accounts Act based on our review. The limited assurance engagement has been conducted in accordance with FAR’s recommendation RevR 19 Revisorns över­ siktliga granskning av den lagstadgade hållbarhetsrapporten . This recommendation requires that we plan and perform our procedures to obtain limited assurance that the sustainability statement is prepared in accordance with these requirements. The procedures in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assur - ance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assur - ance engagement been performed. This means that it is not possible for us to obtain such assurance that we become aware of all signifi - cant matters that could have been identified if a reasonable assur - ance engagement had been performed. Our firm applies ISQM 1 (International Standard on Quality Man - agement), which requires the firm to design, implement and operate a system of quality management, including policies and procedures regarding compliance with ethical requirements, professional standards, and applicable legal and regulatory requirements. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 214 VOLVO CAR GROUP  / SUSTAINABILITY / OTHER INFORMATION ===== SIDA 215 ===== We are independent of Volvo Car AB (publ) in accordance with professional ethics for auditors in Sweden and have otherwise ful - filled our ethical responsibilities in accordance with these require - ments. A limited assurance engagement involves performing procedures to obtain evidence to support the sustainability statement. The auditor selects the procedures to be performed, including assessing the risks of material misstatements in the sustainability statement, whether due to fraud or error. In this risk assessment, the auditor considers the parts of the internal control that are relevant to how the Board of Directors and the Chief Executive Officer prepare the sustainability statement, in order to design procedures that are appropriate under the circumstances, but not for the purpose of providing a conclusion on the effectiveness of the entity’s internal control. The review consists of making inquiries, primarily of persons responsible for the preparation of the sustainability statement, performing analytical review, and conducting other limited review procedures. Our review procedures concerning the entity’s process for identi - fying sustainability information to be reported included, but were not limited to: • Obtain an understanding of the process by: • Perform inquiries to understand the sources of the information used by entity, and • Review the entity’s internal documentation of the process • Evaluate whether the evidence obtained from our procedures about the process implemented by the entity is consistent with the description of the process set out on page 145–147 in the sustainability statement. The review procedures with respect to the sustainability statement included but were not limited to the following: • By inquiries obtain an understanding of the entity’s control envi - ronment, reporting processes, and information systems relevant to the preparation of its sustainability statement • Evaluate whether information identified to be material by the entity’s the process for identifying sustainability information to be reported, is included in the sustainability statement • Evaluate whether the structure and the presentation of the sustainability statement is in accordance with the requirements in ESRS • Perform inquiries of relevant personnel and analytical procedures on selected disclosures in the sustainability statement • Perform substantive assurance procedures on a sample basis on selected disclosures in the sustainability statement • Perform inquiries and analytical procedures to evaluate the meth - ods, data and significant assumptions that have been used to make estimates in the sustainability statement are appropriate and applied consistently The review procedures with respect to the EU Taxonomy included but were not limited to the following: • Obtain an understanding of the process to identify taxonomy- eligible and taxonomy-aligned economic activities and the corresponding disclosures in the sustainability statement • Evaluate whether the activities within the EU Taxonomy are consistent to the financial statements and related notes • Evaluate processes, documentation and assessment of eligibility and alignment with the economic activities and technical screen - ing criteria within the EU Taxonomy • Evaluate whether the reporting is in accordance with the require - ments in EU Taxonomy Inherent limitations In reporting forward-looking information in accordance with ESRS, the Board of Directors and the Chief Executive Officer for Volvo Car AB (publ) are required to prepare the forward-looking information on the basis of disclosed assumptions about events that may occur in the future and possible future actions by the entity. The actual outcome is likely to be different since anticipated events frequently do not occur as expected. Gothenburg March 4, 2026 Deloitte AB Signature on Swedish original Fredrik Jonsson Authorized public accountant OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 215 VOLVO CAR GROUP  / SUSTAINABILITY / OTHER INFORMATION ===== SIDA 216 ===== In 2015, the United Nations established its 17 Sustaina - ble Development Goals (SDGs) as a blueprint for achieving a better and more sustainable future for all. We are committed to these goals and use them to guide UN Sustainable Development Goals our sustainability work. We recognise that we have both a positive and negative effect on the Goals and aim to improve our net positive impact overall. All SDGs we contribute to, and how, are listed below. UN SDG Target reference Examples of Volvo Cars impact and/or contribution 1.2, 1.3 • We aim to ensure a living wage for our employees, as well as for the workers throughout our value chain. Volvo Cars supports the requirements of the International Labour Organization (ILO) and expects its business partners to adhere to and respect the ILO standards. • We help protect our employees and provide all our employees with social protection and insurance. 3.6, 3.9 • We have established a zero collision vision strategy to prevent injuries and fatalities in our vehicles by focusing on prevention and protection. • We aim to eliminate pollution in our value chain and substances of concern in our products. 4.4, 4a • In collaboration with academic institutions and by providing job training, we aim to strengthen competence development. • Volvo Cars partners with the nonprofit Girls Who Code to promote STEM education for girls and nonbinary students inspiring them to pursue careers in the tech and automotive industries. 5.1, 5.2, 5.4, 5.5 • We exercise zero tolerance towards discrimination and all work in the company shall be character - ised by respect for the individual. • Volvo Cars Family Bond offers an all-gender inclusive paid parental leave to help closing gender gap and balancing the demands of work and family. • We run graduate, mentorship, and leadership programs to help women advance their careers and increase female representation in senior roles. We aim to have 34% women in senior leadership by 2030. 6.4 • By 2030, we aim to reduce water withdrawal in our own operations by 50 per cent per manufac - tured car (from a 2018 baseline). 7.2, 7.3 • By 2030, we aim to reduce energy consumption in own operations by 40 per cent per manufac - tured car (2018 baseline). 8.2, 8.4, 8.5, 8.7, 8.8 • Our transformation journey to become a fully electric car company, involves significant invest - ments in electric powertrains, battery technology and the Superset tech leading to increased scalability and efficiency. • We aim towards becoming a circular business by 2040. • To promote equal pay for work of equal value, we perform and analyse gender pay gaps to create equal opportunity workplace. • Volvo Cars prohibits child and forced labour and conducts supply chain due diligence to identify and address risks of human rights violations. • We prioritise a safe working environment by focusing on and reducing our injury rate to 0.02 by 2030, reflecting the ongoing commitment to employee safety and well-being through systematic improvements. UN SDG Target reference Examples of Volvo Cars impact and/or contribution 9.4, 9.5 • In collaboration with other investors and partners, we are establishing Mobility Innovation Desti - nation Torslanda, a mobility innovation centre for emerging technologies, with the aim of connect - ing with other businesses to accelerate innovation. • We have strategic programmes to merge sustainability and electrification into our products and operations, with ambitions for these. 11.2, 11.3 • We are active participants in the Gothenburg Green City Zone initiative, where industry, academia and public actors collaborate to develop and implement a climate neutral transport system by 2030. • We initiated a multi-stakeholder collaboration “BeeGo” within Gothenburg Region to promote bio - diversity and ecosystem services locally and globally in collaboration. 12.2, 12.4, 12.5, 12.6 • By contributing to the circular economy, we aim to significantly reduce waste and consumption of primary raw materials. We seek to optimise the life cycles of our products and components. • We publish our Sustainability Statement in accordance with international standards and guide - lines. 13.1, 13.2, 13.3 • We aim to reach net zero greenhouse gas emissions by 2040. 14.8 • We partner with the Ocean Race to raise the awareness on ocean issues. 15.5 • We have a long-term ambition on nature and biodiversity, aiming to achieve net positive across our value chain and contribute to nature positive. 16.4, 16.5, 16.10 • By encouraging reporting of suspected corruption and bribery through our grievance channel Tell Us, we seek to create transparency, enhancing accountability and deterring corrupt behaviour. • To prevent legal risks in the fields of corruption, trade sanctions and money laundering suppliers are screened in an anti-corruption and trade sanction processes. • We respect the right to privacy and take all appropriate precautions to protect personal data. 17.14, 17.16 • To drive our own sustainability performance and change within our industry, we have a strong stakeholder engagement and are active in several partnerships, commitments and forums. • Volvo Cars supports and advocates for policy development on a wide range of topics for sustaina - ble development. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 216 VOLVO CAR GROUP  / SUSTAINABILITY / OTHER INFORMATION ===== SIDA 217 ===== The Green Financing Framework We launched our Green Financing Framework in 2020. In 2023, the framework was updated to more accurately reflect our strategy, market practices and standards. It is aligned with the 2021 ICMA Green Bond Principles (including the Appendix I update from June 2022) and the 2023 LMA, LSTA, APLMA Green Loan Principles. Our ambition is for all of our outstanding debt to be within the Green Financing Framework or other sustainability-linked formats. Within the framework, we issue bonds and enter bilateral and multilateral credit facilities. Although not all this financing is defined as green by our lenders, it is solely used for projects that conform with the Green Financing Framework. Our framework has been reviewed by CICERO Shades of Green, now part of S&P Global, an independent research and assessment company. Both the initial version and its update received the highest possible CICERO rating with a “Dark Green” shading, which included an excellent grading for governance structure and processes. More information can be found on our website. Financing in 2025 In March, a drawdown of USD 438 m was made under an existing bilateral loan facility with the purpose to finance investments that meet the eligibility criteria set out in our Green Financing Frame - work. The facility was originally signed in 2023/2024 and will mature in 2035. In June, we issued our fifth green bond of EUR 500 m, with a four-year tenor. The proceeds will support our ambition to be a leading player in the premium electric car segment and achieve net zero greenhouse gas emissions by 2040. This includes funding research and development of upcoming electric cars and platforms, and related manufacturing processes. This bond, along with all our previously issued green bonds, is listed on the Luxembourg Stock Exchange. Green Financing Report In September, a new bilateral eight-year loan agreement of EUR 150 m was signed with the purpose to finance investments that meet the eligibility criteria outlined in the Green Financing Frame - work. The loan facility remains undrawn as per the end of 2025. In October, an existing eight-year credit facility of CNY 3,090 m was terminated, and the drawn amount of CNY 259 m was repaid. Allocation report and use of proceeds The net proceeds from loans under our Green Financing Framework and our green bonds are used to finance and/or refinance, in whole or in part, new or existing projects, assets and activities according to our eligibility criteria. The table on the following page describes all outstanding debt, the share of financing and refinancing and the allocation of proceeds, as per 31 December 2025. Any unallocated net proceeds are held in cash or cash equivalents and/or invested in other liquid marketable instruments. As of 31 December 2025, all funds and proceeds from green bonds and loans that meet the eligi - bility criteria in the Green Financing Framework have been allocated. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 217 VOLVO CAR GROUP  / SUSTAINABILITY / OTHER INFORMATION ===== SIDA 218 ===== Impact Report 2025 2024 Fully electric cars (BEVs) retail sales, k units 152 175 Fully electric cars (BEVs) retail sales, % 21 23 Total CO2 tailpipe emissions avoided, k tonnes 1) 3,923 4,340 Reduction of CO 2 tailpipe emissions per car (compared to 2018 baseline), % 42 46 1) Calculated by multiplying number of retail sold BEVs with the global average CO 2 emissions (WLTP) for all manufactured Volvo-branded cars per year, respectively, excluding BEVs. For calculation purposes, an assumed average milage of 200,000 km per car has been applied. Impact Report Environmental impact and benefits in the Clean Transportation category are estimated and evaluated with impact indicators listed in the Impact Report table. As the estimated impact of allocated proceeds will be realised over several years and be dependent on manufacturing and sales of fully electric cars, it is not possible to precisely attribute the share of allocated proceeds to the specific indicators. Therefore, annual corporate performance is used to represent the environmental impact of allocated proceeds. We assume these indicators will assess the effect of clean transporta - tion as a means of climate change mitigation. All new projects are assessed in terms of economic, social and governance risks, as well as the EU Taxonomy alignment. For definitions and calculation methodology of the indicators, see page 162. Use of proceeds and allocation as per 31 December 2025 Green Bonds Loan Facilities 1) Issuance/Date of signing Oct 2020  May 2022  Feb 2023  Apr 2024  Jun 2025 May 2022  Dec 2022  Dec 2023 / Jan 2024 Sep 2025  Maturity Oct 2027  May 2028  Mar 2026  May 2030  Jun 2029 May 2030  Dec 2030  Mar 2035  Sep 2033  ISIN XS2240978085  XS2486825669  XS2593141604 XS2593137917 XS2811097075 XS3088627982 N/A  N/A  N/A  N/A  Currency EUR  EUR  SEK  EUR EUR SEK  EUR  USD  EUR Amount issued (million) 500  500  1,500 500 500 1,000 200  438 150 Amount drawn (million) —  — — — — 1,000 200 438  —  Unallocated 2) (%) —  — — — — —  — —  —  Allocated 3) (%) 100  100 100 100 100 100  100 100  —  Finance (%) 4  70 70 55 45 65  63 87  —   R&D 3  46 70 5 — 65  63 75 —  Manufacturing 4) 2  25 — 50 45 —  —  12 —  Other —  —  — — — —  —  — — Refinance (%) 96  30  30 45 55 35  38 13  —   R&D 31  30  30 45 25 —  38 13 —  Manufacturing 4) 33  —  — — 30 35  —  — —  Other5) 31  —  — — — —  —  — — 1) Refers to facilities with the purpose of financing projects meeting the eligibility criteria under the Green Financing Framework. 2) Refers to the share of unallocated proceeds invested in cash and/or cash equivalent and/or other liquid marketable instruments earmarked for Eligible Green Projects.   3) Refers to the share of allocated proceeds in Eligible Green Projects. 4) Including tooling and facilities. 5) Equity injection in Polestar. 2025 2024 The share of green debt, in accordance with our Green Financing Framework, or sustainability-linked format as percentage of outstanding debt 1) (%)  98 76 1) See Note 19 – Financial Instruments and Financial Risks for definition of outstand - ing debt. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 218 VOLVO CAR GROUP  / SUSTAINABILITY / OTHER INFORMATION ===== SIDA 219 ===== Auditor’s limited assurance report on Volvo Cars’ Green Financing Report This auditor’s report is a translation of the Swedish language original. In the events of any differences between this translation and the Swedish original the latter shall prevail. To Volvo Car AB (publ), corporate identity number 556810–8988 Conclusion We have been engaged by Volvo Car AB (publ) (”Volvo Cars”) to undertake a limited assurance engagement of the Green Financing Report (“Reporting”) for the year 2025 set out on pages 217 and 218 in this document. Based on our limited assurance engagement as described in the section Auditor’s responsibility, nothing has come to our attention that causes us to believe that the Reporting for the year 2025, is not prepared, in all material respects, in accordance with the applicable criteria, as explained in the Volvo Cars Green Financing Framework. Basis for conclusion We have conducted the limited assurance engagement in accord - ance with ISAE 3000 (revised) Assurance Engagements Other than Audits or Reviews of Historical Financial Information. Our responsi - bility according to this recommendation is further described in the section Auditor’s responsibility. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. Responsibilities of Management Volvo Cars Management is responsible for the preparation of the Reporting in accordance with the applicable criteria, as explained in the Volvo Cars Green Financing Framework dated May 2023 (availa - ble at https://investors.volvocars.com/en/debt-information/ green-financing) as well as the accounting and calculation principles that the Company has developed. This responsibility also includes the internal control relevant to the preparation of the Reporting that is free from material misstatements, whether due to fraud or error. Responsibilities of the auditor Our responsibility is to express a conclusion on the Reporting based on the limited assurance procedures we have performed. We con - ducted our limited assurance engagement in accordance with ISAE 3000 (revised) Assurance Engagements Other than Audits or Reviews of Historical Financial Information. This recommendation requires that we plan and perform our procedures to obtain limited assurance that the sustainability statement is prepared in accord - ance with the criteria described in the section Responsibilities of Management. The procedures in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assur - ance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assur - ance engagement been performed. This means that it is not possible for us to obtain such assurance that we become aware of all signifi - cant matters that could have been identified if a reasonable assur - ance engagement had been performed. Our firm applies ISQM 1 (International Standard on Quality Man - agement), which requires the firm to design, implement and operate a system of quality management, including policies and procedures regarding compliance with ethical requirements, professional standards, and applicable legal and regulatory requirements. We are independent of Volvo Car AB (publ) in accordance with pro- fessional ethics for auditors in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. A limited assurance engagement involves performing procedures to obtain evidence to support the reporting. The auditor selects the procedures to be performed, including assessing the risks of mate - rial misstatements in the reporting, whether due to fraud or error. In this risk assessment, the auditor considers the parts of the internal control that are relevant to how Management prepares the report - ing, in order to design procedures that are appropriate under the circumstances, but not for the purpose of providing a conclusion on the effectiveness of the entity’s internal control. The review consists of making inquiries, primarily of persons responsible for the prepa - ration of the sustainability statement, performing analytical review, and conducting other limited review procedures. The review procedures with included but were not limited to the following: • Obtain an understanding of the entity’s control environment, reporting processes, and information systems relevant to the preparation of the reporting • Perform inquiries of relevant personnel and analytical procedures on the reporting • Perform substantive assurance procedures on a sample basis on the reporting • Evaluate processes, documentation and assessment of project evaluation and selection, management of proceeds and reporting, based on the criteria outlined in the Volvo Cars Green Financing Framework Gothenburg March 4, 2026 Deloitte AB Signature on Swedish original Fredrik Jonsson Authorized public accountant OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY GENERAL INFORMATION ENVIRONMENTAL INFORMATION EU Taxonomy Report Climate change Pollution Water Biodiversity and ecosystems Resource use and circular economy SOCIAL INFORMATION Own workforce Workers in the value chain Consumers and end-users GOVERNANCE INFORMATION Business conduct OTHER INFORMATION THE SHARE 220 OUR HERITAGE 222 219 VOLVO CAR GROUP  / SUSTAINABILITY / OTHER INFORMATION ===== SIDA 220 ===== Share performance and trading volume Based on the closing share price on 31 December 2025, SEK 30.70, the Group’s market capitalisation was SEK 91,471 million. The share price increased by 28 per cent during 2025, while the broad index (OMXSPI) increased 9.54 per cent. The highest closing price quoted was SEK 35.75 on 11 November and the lowest closing price quoted was SEK 16.17 on 23 June. A total of approximately 1,540 million Volvo Car AB’s (publ.) shares were traded on all marketplaces with average daily trading volume of 6.2 million shares. Dividend Dividend pay-out will be assessed from year to year based on Volvo Car Group’s net income, financial position and investments needs. Volvo Cars continues to focus on delivering its ambitions and growth strategy. As visibility on the transformation increases in the medi - um-term, the ambition is to increase dividend pay-outs towards industry averages. The Board of Directors proposes that no ordinary dividend is distributed and that the retained earnings shall be carried forward. The share The number of Volvo Cars shares amounts to 2,979,524,179. Each share has a quota value of 0.02 SEK and the share capital amounts to SEK 60,947,709. Volvo Car AB’s (publ.) share capital comprises one series of B-shares, with each share carrying equal voting rights and equal rights to dividends. The most recent occasion when new shares were issued was in conjunction with the IPO in October 2021. Ownership structure As of 31 December 2025, 78.7 per cent of the shares is owned by principal owner Geely Sweden Holdings AB. No other shareholder owns – directly or indirectly – more than 10 per cent of the shares in Volvo Cars. Foreign ownership excluding Geely Holding at year-end corresponded to 6.1 per cent of the share capital. The largest foreign ownership excluding Geely Holding is in the United States, United Kingdom and Belgium. Shareholder communication and financial calendar Information for the capital market and other interested parties is provided on investors.volvocars.com. On the website, it is possible to access financial reports, Annual and Sustainability reports, past events recordings and sales and regulatory press releases. Printed copies of Annual and Sustainability reports are only distributed to shareholders upon request. Dialogue with the shareholders and the market is important for Volvo Cars. Apart from the Annual General Meeting, Volvo Cars maintained active discussions through events, livestream with Q&A in conjunction with the publication of interim reports, investor meetings and visits, meetings with retail shareholders’ associations, as well as roadshows. Volvo Cars also hosted a Strategy Update in November 2025, where the company outlined the long-term strategic direction towards profitable growth. The share The Volvo Cars’ share is listed on Nasdaq Stockholm, where it trades with the ticker VOLCAR B. Basic earnings per share in 2025 was SEK 0.06. Financial Calendar 31 March 2026: Annual General Meeting, Gothenburg, Sweden 29 April 2026: Q1 2026 report 17 July 2026: Q2 2026 report 23 October 2026: Q3 2026 report Annual General Meeting 31 March 2026 The shareholders of Volvo Car AB (publ.), Reg. No. 556810-8988, (“Volvo Cars”) are invited to participate in the Annual General Meeting (the “AGM”) to be held on 31 March 2026, at 13.00 CEST at World of Volvo at Lyckholms Torg 1, SE-412 63 Gothenburg, Sweden. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE OUR HERITAGE 222 ===== SIDA 221 ===== Size class Number of known shareholders Number of B-shares Capital Votes 1–500 125,364 15,920,258 0.5% 0.5% 501–1,000 12,884 9,900,004 0.3% 0.3% 1,001–5,000 12,372 25,700,646 0.9% 0.9% 5,001–10,000 1,536 11,464,424 0.4% 0.4% 10,001–20,000 670 9,746,609 0.3% 0.3% 20,001– 682 2,906,792,238 97.6% 97.6% Total 153,508 2,979,524,179 BREAKDOWN BY SIZE 31 DECEMBER 2025 Owners Number of B-shares Capital Votes Geely Sweden Holdings1) 2,343,396,227 78.7% 78.7% AMF Pension & Funds 103,351,869 3.5% 3.5% Folksam Group 60,644,305 2.0% 2.0% Alecta Pension Insurance 29,650,000 1.0% 1.0% Handelsbanken Funds 25,921,166 0.9% 0.9% SEB Investment Management AB 23,112,523 0.8% 0.8% Ithaki Limited 21,455,443 0.7% 0.7% Nordea Funds Oy 20,678,022 0.7% 0.7% The Vanguard Group, Inc. 20,531,859 0.6% 0.6% Tredje AP Fonden 18,839,000 0.6% 0.6% Ten largest owners, total 2,666,758,414 89.5% 89.5% Others 311,943,765 10.5% 10.5% Total 2,979,524,179 100% 100% 1) Geely Sweden Holdings AB is owned by Shanghai Geely Zhaoyuan International Investment Co., Ltd., registered in Shanghai, China, and ultimately owned by Zhejiang Geely Holding Group Ltd., regis - tered in Hangzhou, China. TEN LARGEST SHAREHOLDERS 31 DECEMBER 2025 VOLCAR B – SHARE PRICE DEVELOPMENT OWNERSHIP BY COUNTRY Volvo Cars share as of year-end 2025 Sweden 15.28% United States 1.80% United Kingdom 1.26% Belgium 1.09% Luxembourg 0.71% China 78.65% Other 1.20% OWNERSHIP BY CATEGORY Swedish institutional owners 11.84% Swedish private individuals 3.02% Foreign institutional owners 6.49% Geely Sweden Holdings AB 78.65% Symbol: VOLCAR Market cap: SEK 91.47 billion Number of known shareholders: 153,508 Basic earnings per share: SEK 0.06 January 2025 December 2025 VolumeSEK Volvo Cars OMXS PI (Rebased) Volume 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 00 20 10 30 40 50 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE OUR HERITAGE 222 VOLVO CAR GROUP  / THE SHARE  221 ===== SIDA 222 ===== 1927 – Assar Gabrielsson and Gustaf Larson launch the first Volvo car in Gothenburg, Sweden. The car was an open tourer with a four-cylinder engine. 1972 – Environment was added to our core values, Safety and Quality. Volvo invented the rearward-facing child safety seat. 1976 – Volvo released the Lambda Sond, the world’s-first catalytic exhaust control system that reduces harmful emissions. Volvo was officially chosen as the safety standard benchmark for all new cars in the USA. 1977–1978 – Volvo 240, was awarded the American National Environmental Industry Award and named the cleanest car by the California Air Resources Board. 1978 – Volvo Cars was spun out as a separate entity from AB Volvo. 1944 – “The little Volvo” (PV444), was a car that turned Volvo into an international car company was unveiled in Stockholm. 1953 – The Volvo Duett was launched as “two cars in one” – for both work and leisure. 1955 – The first PV 444 was unloaded at a port in Long Beach, California. Two years later Volvo Car had become the second-biggest import brand in California. 1959 – Volvo engineer Nils Bohlin invents the three-point safety belt. 1964 – Our plant in Gothenburg was inaugurated and is still our largest production facility. ’70 s ’ 40s–’60s Volvo Cars was founded upon the concepts of quality and safety by Assar Gabrielsson and Gustaf Larson in Gothenburg, Sweden, and in 1927 the first Volvo car, was released. Ever since our founding in 1927, we’ve been designing cars that put people first and we have become a truly global company renown for safety selling approximately 710,000 cars all over the world. Our heritage – An exciting journey and decades of innovations 1984 – The sales of Volvo 740 and 760 were a great success. ’80s OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 222 VOLVO CAR GROUP ===== SIDA 223 ===== 2001 – A new generation of environmentally adapted diesel engines was launched. 2002 – Volvo XC90 was launched and became an instant success all over the world. 2007 – Volvo ReCharge Concept Car, a plug-in hybrid was first displayed. 2008 – The City Safety, a low-speed auto brake solution that automatically is braking the car in the event of imminent risk of collision was introduced. The popular DRIVe series encompassed seven models classed as green cars. 1991 – Volvo presented Volvo 850 – the largest product investment since Volvo introduced the Side Impact Protection System. 1998 – Volvo developed the Inflatable Curtain. 1999 – Volvo Cars was acquired by Ford Motor Company. ’00s ’90s 2010 – Geely Holding acquired Volvo Car from Ford. 2011 – Volvo Cars appointed top car maker in Sustainable Brands. 2013 – The four-cylinder powertrains featuring a lightweight base powertrain replaced its fourteen- engine powertrain family predecessor. We established a manufacturing joint venture with Geely Holding and built two manufacturing plants in Chengdu and Daqing, China. Volvo C30 awarded “Green Car of the Year” in China. 2014–2015 – The in-house development of the Scalable Product Architecture (SPA) was completed and the new generation XC90, the first car model built on the SPA, started a new chapter in our history. 2017 – We announced our electrification strategy. ’10s The Volvo XC40, the first model based on our compact modular vehicle architecture (CMA) was introduced. It set our new standard in design, connectivity and safety. 2017 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE VOLVO CAR GROUP  / OUR HERITAGE 223 ===== SIDA 224 ===== Our long-term sustainability ambitions to become a climate neutral company and circular business by 2040 was announced. We launched XC40 Recharge P8, our first fully electric SUV. Our first model equipped with an infotainment system powered by Android. 2019 2018 2020 Engine production facility in Skövde, Sweden becomes a climate neutral (in terms of CO2 emissions) production facility. A solar energy installation was unveiled at the Ghent factory. The production facility in Charleston, South Carolina, was opened establishing a global manufacturing footprint. Subscription based Care by Volvo and Volvo Car Mobility was announced. We partnered with NVIDIA for the development of a highly capable, AI-based, central computer for the next generation of Volvo cars. Production of XC40 Recharge starts in Ghent. The climate plan, under which Volvo Cars strives to become a climate neutral company by 2040, was scientifically verified by the Science Based Targets initiative (SBTi), a collaboration that provides companies with a clear pathway to support the Paris Agreement. Started production of second fully electric model C40 recharge. On 29 October Volvo Cars became a listed company on the Nasdaq Stockholm stock exchange. 2021 OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE VOLVO CAR GROUP  / OUR HERITAGE 224 ===== SIDA 225 ===== Launched the new Volvo EX30. Revealed the Volvo EM90, our first MPV. Opened new Tech Hubs in Krakow, Poland and Singapore. Volvo Cars continued the commercial transformation as shown by the transition of the UK market to a direct model. Volvo Cars declared the end of diesel at Climate Week NYC – our last diesel car will be produced in early 2024. Unveiled the new Volvo EX30 Cross Country. Completed the divestment of its 30 per cent stake in Lynk & Co. Launched the all-new, fully electric Volvo ES90. Introduced world first multi-adaptive safety belt. Launched the first long-range plug-in hybrid, the Volvo XC70 SUV. 2023 2025 2022 2024 We in collaboration with Northvolt announced the establishment of a new battery plant in Gothenburg. Announced that we will establish an electric car manufacturing plant in Slovakia. We become a founding member of Accelerating to Zero Coalition, calls for more climate action from governments. Launched the new Volvo EX90. Divested its 33 percent holding in Aurobay to Geely Holding, aligned with the electrification ambitions. Start of production for the flagship SUV EX90. Announced a new approach on technology: The Volvo Cars Superset tech stack. Launched an updated version of the XC90 hybrid SUV. Distributed 62.7 per cent of it shareholding in Polestar Automotive Holding UK PLC to shareholders. Took full ownership of HaleyTek. OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE VOLVO CAR GROUP  / OUR HERITAGE 225 ===== SIDA 226 ===== Forward looking statements This report contains statements concerning, among other things, Volvo Car Group’s financial condition and results of operations that are forward-looking in nature. Such statements are not historical facts but, rather, represent Volvo Car Group’s future expectations. Volvo Car Group believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions. However, forward-looking statements involve inherent risks and uncertainties, and a number of important factors could cause actual results or out - comes to differ materially from those expressed in any forward-looking statement. Such important factors include but may not be limited to: Volvo Car Group’s market position, growth in the automotive industry, and the effects of competition and other economic, business, competitive and/or regulatory factors affecting the business of Volvo Car Group, its associated companies and joint ventures, and the automotive industry in general. Forward-looking statements speak only as of the date they were made and, other than as required by applicable law, Volvo Car Group undertakes no obligation to update any of them in light of new information or future events. Language In the event of inconsistency or discrepancy between the English and the Swedish version of this publication, the Swedish version shall prevail. Totals and roundings Totals quoted in tables and statements may not always be the exact sum of the individual items because of rounding differences. The aim is that each line item should correspond to its source, and rounding differences may therefore arise. This includes comparative calculations including Year-over-Year change percentages. DEFINITIONS Volvo Cars and Volvo Car Group Volvo Car AB (publ.) together with its wholly-owned subsidiary Volvo Car Corporation and its subsidiaries are jointly referred to as “Volvo Car Group” or “Volvo Cars”. Volvo Car AB (publ.), with its regis- tered office in Gothenburg, Sweden, is a publicly listed company on the Nasdaq Stockholm Stock Exchange (traded under the ticker VOLCAR B). The largest owner, holding 78.65% of shares and capital, is Geely Sweden Holdings AB, owned by Shanghai Geely Zhaoyuan International Invest- ment Co., Ltd., registered in Shang- hai, China, and ultimately owned by Zhejiang Geely Holding Group Ltd., registered in Hangzhou, China. Volvo Car AB (publ.) holds shares in its subsidiary Volvo Car Corpora- tion and provides the Group with certain financing solutions. Volvo Car AB (publ.), indirectly through Volvo Car Corporation and its sub- sidiaries, operates in the auto motive industry with business relating to design, development, manufactur- ing, marketing and sale of cars and thereto related services. Associated companies Associated companies are compa - nies in which Volvo Car Group has a significant but not controlling influence, which generally is when Volvo Car Group holds between 20% and 50% of the shares. Joint venture companies (JVs) Joint ventures refer to companies in which Volvo Car Group, through contractual cooperation together with one or more parties, has joint control over the operational and financial management and has rights to the net assets of the arrangement. Retail sales Retail sales refer to sales to end customers (including a portion of cars used as customer loaner and demo cars) and is a relevant measure of the demand for Volvo Cars from an end customer point of view. Wholesales Wholesales refer to new car sales to dealers and other customers including rentals. Europe Europe is defined as EU+EFTA+UK. Passenger cars Passenger cars are vehicles with at least four wheels, used for the trans - port of passengers, and comprising no more than eight seats in addition to the driver’s seat. Traditional premium segment Traditional premium segment is the premium market brands such as Volvo Cars, Audi, BMW, Lexus, Mercedes and so on. Battery Electric Vehicles (BEV) BEV cars include all vehicles which are 100% fully electrified cars. Non Battery Electric Vehicles (Non-BEV) Non-BEV cars include all vehicles which are not 100% fully electrified cars (BEV). For Volvo Cars, it includes plug-in hybrid (PHEV), mild hybrid (MHEV) and internal combustion engine cars (ICE). Extended Range Electric Vehicle (EREV) EREV cars are cars charged by plug-in but also have a small gasoline engine that charges the battery while driving, which increases driving range. Electrified cars Electrified cars include 100% fully electric cars, the same as the Battery Electric Vehicles (BEV), and Plug-in hybrids (PHEV), in both petrol and diesel with cord for charging. ICE Internal combustion engine, including all powertrain types except plug-in hybrids (PHEV) and fully electric vehicles (BEV). Agency personnel / Consultant Agency personnel/consultant is referred to as specific competence that is sourced externally and assigned to meet fluctuating business resource needs. Contract manufacturing A business model in which a third- party company is contracted for the production of goods or components over a specified contract period. Repurchase cars Cars under repurchase agreement are cars such as company cars and cars sold to rental companies. These cars are sold under a contract with a commitment (the right or obligation to buy back the car). Investor Relations investors@volvocars.com Media Relations media@volvocars.com INFORMATION AND CONTACTS Volvo Car Group Headquarters Gunnar Engellaus väg 8 SE-418 78 Gothenburg, Sweden www.volvocars.com OVERVIEW 3 MARKET 15 OUR STRATEGIC FRAMEWORK 18 DIRECTORS’ REPORT 29 RISK 36 CORPORATE GOVERNANCE 42 FINANCIALS 61 SUSTAINABILITY 130 THE SHARE 220 OUR HERITAGE 226 VOLVO CAR GROUP ===== SIDA 227 =====