Swedish automaker Volvo Cars reported a rise in first-quarter adjusted operating earnings on Wednesday, helped by lower material costs and higher volumes. While automakers and suppliers are betting on future demand for EVs, sales growth has slowed, with investment in capacity and technology development outrunning demand, boosting pressure on companies to cut costs. "We expect demand for our cars to remain robust in coming quarters in line with our guidance of full-year sales volume growth of at least 15 per cent," CEO Jim Rowan said in a statement.

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Volvo Cars said on Wednesday its operating income excluding joint ventures, associates and one-offs rose 8 per cent to 6.8 billion Swedish crowns ($629.27 million) in the quarter from a year-ago 6.3 billion. Unadjusted operating earnings however fell to 4.7 billion crowns in the quarter from 5.1 billion a year ago on the back of a decline in sales due to a negative foreign exchange rate and lower contract manufacturing sales, it said.

Volvo's BEV (battery-electric vehicle) gross margins were 16 per cent in the quarter, a rise from the previous quarter's figure of 13 per cent, underpinning Rowan's firm stance that its margins will continue to rise.