Good morning, and welcome to the presentation of the second quarter of financial earnings, coming to you from our headquarters in Gothenburg. Those were, of course, some of the highlights from the big reveal we did last month of the small, fully electric SUV, the Volvo EX30, one of the key highlights for this quarter. We'll talk more about that in the course of this earnings call. My name is Ronojoy Banerjee. I'm in Communications, and as always, I'm joined this morning by our President and Chief Executive, Jim Rowan, and our Chief Financial Officer, Johan Ekdahl. It should be familiar to you by now, but we will start this earnings call with Jim and Johan walking us through our performance during the second quarter, after which we'll throw it open for a live question-and-answer round. If you have any questions, please send it to us. You can either use the chat window that you see at the bottom of your screen, or else just use the phone lines, and then we can hear you. I'll come back with more details before that, but for now, Jim, over to you. Thanks, Ron. Hey, welcome everyone to our second quarter results. Let's categorize as Q2, full speed ahead in transformation with solid underlying business performance. The share of fully electric cars at 16% versus 7% in Q2 2022, with sales up 178%. Retail sales up 25% versus Q2 last year. Production volumes up 50% versus Q2 last year. A stable order book. We've maintained our premium pricing. Underlying EBIT has been improving, weighed down only by non-recurring restructuring costs, which Johan will talk to in some detail in a moment. The U.K. transformation into fully direct sales has now happened. We're starting to see the benefits of that come through. Strategic collaboration and agreements with leading semiconductors has helped to stabilize our manufacturing and our supply chain. We have launched the EX30 with strong customer response. If we look to the financials, retail sales up 25%, revenue up 43%, and our EBIT margin, when compared to Q2 last year, has gone from SEK 4.6 billion- SEK 7.3 billion. Johan will pull out the details on all of this in just a few moments. Despite multiple headwinds, we are tracking towards our mid-decade ambitions. Let me just frame what we mean by mid-decade ambitions. That is from the start of 2025 until the end of 2026. During that timeframe, we expect that we will reach 1.2 million unit run rate per month, that we will be 50% fully electric in our car sales, that we will be 50% online in our sales, that we will achieve between 8% and 10% EBIT margins, and our CO2 reduction will be at 40% when compared to a baseline of 2018. We're starting to see the share of fully electric and plug-in hybrid cars now really start to explode through the world. It's a global phenomenon that is gathering pace. We're seeing companies like France, Belgium, the Netherlands, Ireland, all moving towards either fully electric or plug-in hybrids. This means we have 15 countries which now show more than 74% of either plug-in hybrids or full BEV sales. When you look at BEVs in isolation, again, the story is the same. We see countries like Denmark now at 41%, the Netherlands at 50%, and of course, Norway over 80%. This is a phenomenon that we think will gather pace over the next few years and positions us well to meet our end-decade ambitions of being a fully electric car company. On that, this will be boosted by the launch of our EX30. The EX30 we launched just recently, and it is our smallest SUV to date. You saw some of the highlights already at the start of this presentation. While the EX30 may be small, we think that it represents a huge opportunity for our company. With this car, we will enter an important new segment and a new demographic for the company, one that will help us grow rapidly in the coming years. The EX30 will also boost our growth and our profitability in the future of electric cars, with gross margins for this car expected to be in the range of 15%-20%. We're also delighted to share today that the response to this car has been overwhelmingly positive, and that the order intake for the EX30 has exceeded even our ambitious projections. We're grateful for the warm welcome this car's received. This car will start its production life in Q3. The customers will sit behind the wheel of this car before the end of this year. Again, something that's very exciting for us here at Volvo Cars. With that, I will hand you to Johan, who will take us through the financial update in some details. Johan? Thank you, Jim. Good morning. On the financials, really a solid quarter with improving underlying operations. Retail sales up 25%, really showing the continuous improvement in our production and supply chain. Revenue up even more, 43%, also showing that we are still able to maintain a premium pricing level, with revenue growing more than the sales volumes. On EBIT, if we concentrate first on the Volvo core underlying operations, excluding JVs and associates, we increased the profit from SEK 4.6 billion last year in Q2 to SEK 7.3 billion this year, from 6.5%- 7.2% EBIT margin. The margin has been affected by a one-timer, a non-recurring item, related to our cost efficiency program of slightly less than SEK 1 billion, taking us down to SEK 6.4 billion, including non-recurring items, or 6.3%. On the full group, including JVs and associates. 2022 Q2 was heavily positively, affected by the accounting valuation effect, related to the listing of Polestar of around SEK 6 billion, which this then included in the SEK 10.8 billion last year. That's really important to bear in mind when comparing Q2 2022 to 2023. On cash flow, a positive cash flow for the period, SEK 1 billion free cash flow, also then to some extent affected by structural investments during the second quarter of this year. Still a positive cash flow despite that. All in all, a solid quarter. If we look on revenue, we see a big effect, of course, from, the increased volumes. We are more or less flat when it comes to mix and pricing in the quarter. We have a still quite nice tailwind from FX and also some contribution from the JV contract manufacturing on Polestar. On other positive effects, mainly also good deliveries of sales of parts and accessories, taking us then in total to the revenue of SEK 102 billion for the quarter, or an increase of 43% compared to the same period last year. On EBIT, concentrating again on excluding JV and associates, SEK 4.6 billion last year. We see a big effect, of course, from the increased volumes on the back of the improved production and still healthy demand, SEK 6 billion in effect. Sales mix and pricing, slightly negative, really due to several factors. One being that on the back of the improved production, we see a normalized mix, if you will, which have some effect, and also the increased share of BEV cars compared to last year has a slightly negative effect. We'll come back more to the BEV margins shortly. Slightly net positive on FX and on other, the 2.3 negative year-over-year still consists the largest part of elevated raw material prices. However, we expect now raw material prices to start materializing on a lower level into the second half of the year. That has then taken us to SEK 7.3 billion or 7.2%. On top of that, we have the restructuring cost, a one-time cost in Q2 of SEK 0.9 billion related to the redundancy program as a part of our cost efficiency measures that we are taking in order to be more competitive going into the future from a cost structure perspective. Including JVs and associates, last year, again, heavily affected in 2022 Q2 by the SEK 6 billion positive effect from the listing of Polestar. That is really affecting the comparative number. BEV margins then, 3% into the quarter. As expected, really, our BEV margins in the second quarter were affected by a number of factors. One, the lithium and other raw materials used in these cars were sourced at peak levels in 2022. Also secondly, the effects of increased pricing on full electric cars that haven't really yet taken full effect. Going forward, for our existing models, we are introducing a considerably better range, thanks to increased energy density and more efficient built in-house e-motors. Together, this will really help to secure our premium position in the market. As such, we expect BEV margins to improve considerably in the second half of the year, and this trend is expected to continue into 2024, also, especially when EX30 start to hit markets with even better margins, as we have seen previously. The low level that we are at now is really a Q2 phenomena, which we then expect to improve during the rest of the year. On liquidity, as I said, positive free cash flow in the quarter, which makes us still being at a very healthy liquidity level going out of Q2. Also, considering that we do have a period of high investments, but also contributions from a positive EBITDA and working capital, which then is keeping us at a very healthy and solid liquidity level. With that, I will leave back to Jim to summarize the quarter. Thanks, Johan. Okay, in summary, our order book remains robust, including the EX30 and the EX90 pre-orders, which will set us well, certainly for 2024 and beyond. Production output continues to improve. Effects of lower raw material prices to accelerate in the second half of the year, as Johan just alluded to. Our global cost efficiency measures is developing as planned. Already we're starting to see the benefits of that. Retail deliveries are on track. Solid double-digit growth is expected for 2023. Execution remains our focus. So far this year, we have launched the EX30. We have improved fast-charging infrastructure across North America for our customers. We have transformed the U.K. to a direct sales market. We've strengthened the vertical integration of our company by the introduction of e-motors and higher energy density battery, and we have secured our BEV margins for improvement going forward. With that, I'll hand back to Ron, and we'll take some questions. Thank you. Well, thank you very much for that, Jim. We're all set now to start this Q&A round. We can already see a lot of questions coming in. For those of you who still want to participate, please use the chat window that you should see at the bottom of your screen, in which case I will then read out the questions on your behalf, or if you want to use the phone lines, then just simply use the QR code. Before we get started, let me also invite our Head of Investor Relations, John. Good morning, John. Good morning. All right, let's get started. Let me take the first question. Maybe I can read this out. It does not have a name, please identify yourselves so we know who you are. Jim, how would you summarize the second quarter? What number really sticks out for you? I think when you're looking at the businesses, there's a lot to unpack, obviously, in the results. If you look at the underlying operational performance of the business, that's really what I think sticks out for me. If you look at that year-over-year, we've gone from SEK 4.6 billion- SEK 6.4 billion, and that includes the one-time charge of SEK 900 million. If you include that one-time if you exclude that one-time charge, really our underlying EBIT performance has gone from SEK 4.6 billion- SEK 7.3 billion. I think that underlying performance is something which encourages us because we're still gonna see an improvement in lithium prices as we go through the back end of this year and into next year. Next year, we also have the benefit where we will see the EX30 become a much bigger part of our electrification journey. The EX90 will also come in, and the EX30, we've already said, should be at gross margins around 15%-20%. Those are solid foundations, I think, upon which we will build our full electrification journey, 50% by 2025 and 100% by 2030. That's really the number that sticks out for me. All right. Thank you. Let's take a caller then. We have José Asumendi from JPMorgan. Good morning, and please go ahead with your question, José. Hey, thank you very much. A couple of questions, please. José from JPMorgan. Can you comment please on the launch of the EX90? How is that progressing, and how do you expect that to impact the second half of the year? Also, can you comment on restructuring charges that you took on the second quarter? Do you foresee additional restructuring charges into the second half of the year or maybe next year as you continue to progress and improve the efficiency of the overall company? The final one, if you can comment please on CapEx and R&D for the full year 2023. Thank you. Hi, José. Thanks for the questions. Let me take the first one on the EX90. As you know, we pushed the start date, the production start date of the EX90 out, simply driven by the complexity of the software code in that car. This is a brand-new platform for us. It's the flagship product for us, it's the first time that LiDAR will be a standard, if you will, in a range. It's the first time that LiDAR will be introduced as a new technology. We're writing the perception stack software and the sensor fusion software for that for that safety layer. We wanted to make sure we get that, you know, bang on. We need to get that right. We pushed out the development of that to give the engineering teams a little bit more time to make sure that when we launch that car, then the customers get the best experience possible. We're on track, as we had previously said, we've pushed it out five or six months. We're on track to launch that car, as we had said a few months ago. Maybe the restructuring cost, any spillover into H2 or 2024? And the restructuring cost, the absolute main part is taken now in Q2 for that redundancy program. We don't foresee any material non-recurring charges on restructuring in the second half of the year. And on. I would- Yeah. CapEx, R&D. Yeah, on CapEx. Any comments you could give? Thank you so much. On CapEx, we are in a period where we do quite a lot of investments, which we will continuously do in the next coming years. New cars, new architectures, production footprint, etc. However, when we go into next year, when the EX30 and then subsequently the EX90 is into production, we will see a slightly normalized capitalization rate, if you will, which will go down to a more over time normalized level. We will also, of course, then see some increases in amortization when these cars go into production. That will happen during the course of 2024 then, after both cars are starting to be sold. Maybe just let me add another point. You asked about the delay in the EX90. Again, just to clarify, the EX30, which we announced just a couple of months ago, production for that car is scheduled to start in Q3, and we should have customers behind the wheel of that car in Q4. That's in a different platform, that's a much more robust platform, it's a platform that's already known to us. That, I think, helps just maybe clarify the difference between the 30 and the 90. All right. Thank you. Thank you very much. Hope, yeah, hope that answers your question, José. Let's take another caller then. We have Daniel Roeska from Bernstein. Good morning, Daniel, and please go ahead with your question. Hi. Good morning, everybody. It's Daniel from Bernstein. Two for me then. Number one, on pricing, the BEV pricing seems to have taken a turn for the worst this quarter. Could you just help us by sharing some of the moving parts within that bucket to then understand kind of your level of comfort for the second half, across the region, maybe mix, maybe models? You know, why was BEV pricing so much lower, and declined faster than the combustion engine car pricing? Secondly, maybe more on a strategic level, just wondering about BEV penetration... Globally, right? In the next 12 months. Maybe, Jim, are you prepared to invest downstream in solutions like charging, or other ideas to help consumers adopt the technology? Maybe the other way around, towards the upstream, right, have you uncovered any potential investment requirements you have? We've had other OEMs go into refining or actually buy mines, so any additional investment requirements you've uncovered kind of in the upstream from the OEM? Thanks. Yeah. Yeah, maybe I can comment on the BEV cars first. We see, as we said in Q2, we have a number of effects. One is that the cost for the cars are elevated due to that the cars were manufactured at the time where we had raw materials more or less at a peak level. We have also deliberately sold some inventory of model year 2023 cars, with partly on campaigns, due to the fact that now model year 2024 is coming in, as we said, with a significantly improved range, which will also cater for improved pricing. On the back of that, also, lithium prices will flow through at a lower level in the second half. We will see considerably improved BEV margins into the second half of the year. Also due to a little bit of a delay in production of certain BEV cars due to the closures of the Ghent factory, et cetera, we had some inventory that has been at slightly lower levels sold out during the quarter also, which is a deliberate decision in order for now the better priced and ranged cars coming into the third quarter. On the charging stuff, and this, I guess the general supply chain. We make a lot of these decisions in terms of what do we build versus what do we buy? That's different in different parts of the world. In Brazil, for example, we do invest in charge infrastructure. We already do that for the benefit of our customers, and we do that directly. In places like North America, you probably saw we just signed an agreement with Tesla, which allows all of our customers to use that fast charge infrastructure that's already been built out by Tesla, there's an immediate benefit then to our customers. In the likes of Europe, we use companies like DCS and Plugsurfing, which allows us then to use that aggregated charge infrastructure and gives access to our customers across the various different manufacturers and suppliers across Europe. When you, when you dial that back into, okay, where else do we want to vertically integrate? We've decided that we think that silicon is something which we can partner with, so we've decided to choose partners with a silicon like NVIDIA and Qualcomm that give us access to high computational silicon without the need for that deep investment that you need to make in semiconductors. Batteries, we've decided to build in-house, as well as source, so that will be a mixed model. We want to really understand battery chemistry and next generation manufacturing on cells, as well as cell-to-pack. We'll learn all of that through the joint venture that we have with Northvolt, that's already started. We've cut the ground on that already here in Sweden, and that operation will be up and running in 2026. Then on e-motors, we've brought those in-house. We used to buy our e-motors externally, we've brought those in-house. In fact, that's one of the reasons that we can offer extended range in the new XC40 and C40, because of the efficiency that we've managed to drive out of that new e-motor design and the silicon carbide inverter modules that we're designing. We look at this pretty forensically, if you will, in terms of what do we build, what do we buy, where is our money best spent in terms of investments, and how do we gather the most benefit for our customers and the highest potential growth with the best margin structure? That is something that we pay a lot of attention to. Thanks. Maybe just as a follow-up, Jim, is there anything in the past kind of six months where you've kind of changed directions or said, "Well, maybe we do need to, we do need to build or kind of insource parts of the chain where we, where we previously thought that wasn't the case? Not so much in build. In terms of intelligence and analytics, we're adding an analytics layer on top of our supply chain architecture that allows us to much more deeply understand on a more real-time basis, exactly what is happening across the supply chain. That is being implemented as we speak. We've also started direct relationships with the semiconductor companies. It used to be that we relied on the tier one suppliers to have those direct relationship with the semiconductor people. We are now, as part of that conversation, and have direct relationship with many of those semiconductor companies. That allows us, one, the intelligence, and two, the direct access. Where it makes sense for us, we will buy those semiconductors to make sure that we get them, and then we can supply those to the tier one for the inclusion and the final sub-assembly that they then supply to us. That's the, you know, that's basically the direction of travel that may have changed, if you will, over the last six months. Okay. Thank you, Daniel, for the questions. Let's take one online then, that's come in. This is from Konstantinos Bitzilios: "Sales of BEVs increased by 178% during Q2, but the pace of public charging installations in Europe is much slower. Does this worry you? What needs to happen? I'll take it. I can take that. I think what you're finding now is that you're starting to see some external investments now going in. You're starting to see some of the big private equity companies getting involved and investing in the long-term infrastructure for electrification. That will continue, and it's not about the number of chargers per se, it's about the number of fast chargers. I think that's really the shift that you're starting to see now. It's fine if you have a big installation of AC chargers, but it takes, in many cases, that takes too long to actually charge for the consumer. You need to now build an infrastructure of D.C. chargers, 50 kW to 150 kW, preferably, and that's what we're starting to see happen now. I think that will continue. Our intelligence tells us that we're starting to see a lot more interest and investments being made in that. I'm speaking specifically in Europe for that. When you look at the Inflation Reduction Act in the USA, that is going to drive a tremendous amount of investment into charge infrastructure across the USA. I think that will only be a good thing for the entire EV industry. All right. Thank you. Now we have another caller on the line. That is George Galliers from Goldman Sachs. Good morning, George. Good morning. Jim, in your comments in the press release, you did mention that demand continues to normalize, which brings some additional pricing pressure. Were there any specific markets or segments where you're seeing pricing pressure? How do you think Volvo is positioned in terms of weathering the pricing pressure? Obviously, you have several new and exciting battery electric vehicles, but that is a market where we're seeing a lot of pressure in China and also certain competitors cutting prices in other markets. Meanwhile, obviously, because of your focus and rapid transition to electrification, some of your internal combustion engine vehicles are perhaps older than some of the products being introduced by the Germans at this point in time. The second question I had was just on the cash flows. Would it be possible to just give us some insight into the known cash outs that you're expecting in the second half around restructuring costs, payments to China JVs, and then also any potential cash ins that you're aware of that will take place in Q3 and Q4? Could you remind us how much of the loan to Polestar has not been drawn at this point? Thank you. Let me take the price point, and I'm sure Johan will elaborate on that as well. I'm glad you asked the question, George, so we can just clarify that. Right now, we are seeing a strong and robust demand for our product pretty much globally. There are certain parts of the world that, which are stronger, other parts of the world which are a little bit softer. For the best part, across our product portfolio and across our geographies, we're seeing strong demand. That gives us, you know, that gives us the position that we don't feel that we need to be involved in any price reduction. We still feel we have pricing power in the market. We're in the premium sector. I think that it has become a lot more pronounced in terms of price pressure in the mass market sector. We don't see it as much in the premium market sector, other than a few places around the world. Pricing for us is not something that we intend to get involved in any price cutting in any specific... As Johan said earlier, when we had the model year change from 2023 to 2024, specifically on the C40 product, then you were offering a brand-new product which had 70 to 80 km additional range, then, of course, you want to get those products in the market before you bring in your model year 2024. That's really, that was a very tactical decision that we made at that point in time, pretty much focused in the U.S. market at that point. Other than that, we actually don't see a huge amount of price pressure in the market, for our products at least. Anything on the cash flow front, Johan? Yeah. On cash flow, if we start with the restructuring cost and other, let's call it non-operational parts, the provision that we've made now of slightly less than SEK 1 billion will, of course, come in as cash flow in the second half. With the, in addition to that, we don't foresee on a net basis, I think, the so-called, you know, structural investments that we call them, will be virtually zero on a net basis into the second half of the year. The main part of that has been taken in the first half, so it will not have any significant effect in the second half of the year. With that said, then the loan to Polestar has to the absolute majority already been drawn in the first half. Good. Thank you. Yeah. I was just thinking about the comment on pricing. I mean, as you know, I mean, the last three years, the industry hasn't been able to sort of meet demand with the supply, and now we're getting into a point where we are increasing production. We also said in previous calls that the pricing environment that we saw in 2022, that level will not persist into the future. It's also important to bear in mind, as you look at the net pricing and the discount levels, they are far from sort of, call it, pre-pandemic levels. I think it's, it varies in between markets, but it's not so that we experience a significant price pressure on our products. We are still having a significant order book, as you know, in Europe, that we're building on. As we would be very active in price actions in Europe. We will only build on top of that order book, which is already quite long. Of course, we're monitoring this, but there's no drama as we see it in our numbers. That's a good point. Just to pivot on that, the EX30 we released to the market at a starting price of $35,000 at a gross margin for us between 15% and 20%. By and large, the feedback from the market was that's a very competitively priced product. 480 km range, full of new technology, and of course, it's a small SUV and a fantastic city car. Still being able to get 15%-20% margin, that, I think, probably is the best signal that we can give, that we feel pretty comfortable that we can price well in the market but still make those, those margins, especially in BEV. 15%-20% on BEV products, I think puts you in the upper tier of the marketplace in what, in terms of what people are managed to extract from BEV cars at this point. Thank you, George. Great, thank you. Hope that answers all your questions. Let's take another caller then. Let's take Erik Golrang from SEB. Good morning, Eric. Thank you. A couple of questions. First one, on your comment about the order book being strong, including the one for the EX90 and the EX30. Just trying to sort out the sort of maybe if there's a changes in the duration of the order book. We know the EX90 is wrapping up until some point sort of into mid next year, EX30 coming on now. Your overall book might be strong, but I guess my question is, has the duration of it sort of extended, i.e., are there a bit of gaps in there? Then a bit of a follow-up to that on your ICE offering. Are you concerned that for as we know, that you don't really have any sort of new ICE models coming? For how long do you think your current hybrid and ICE offering is competitive without that? Thank you. Yeah. Yeah. Maybe I can start on the order book. Yeah, the answer is that, we have a almost record high order book- Uh-huh There's no gaps, as you refer to it. We still have an order intake in general and on a global level, healthy demand, which means that the order book is kept stable. The answer to whether there are any gaps in time, if you will, the answer is no. Even if you exclude the orders for EX30 and EX90. Yeah ... It's still at two times normal level. Mm-hmm. The ICE offering. Yeah, I'll come back on the ICE. The EX30 as well, we've, I don't think we've explicitly said this is gonna be a volume car for us. This is gonna be, you know, one of the highest volume cars that we sell. That, as we get into full volume of that next year, we should just point out at this part as well, that we've put in the production capacity to have a very steep ramp on that car, because we're hopeful that the volumes will materialize very quickly. Of course, the pre-orders would think that we may have got that right. In terms of the ICE and the existing products, we are making and we'll continue to make upgrades to our ICE products to make them fit for the future. That's not bringing out new ICE models per se, obviously, the XC60, the XC90, and so on. We will be making constant improvements to those cars in order to make sure that they are fit for the future, and that they can compete with the latest products that are available in the marketplace. Those investments are already baked into our business plan. Okay, thank you. Let's take a question online then. This comes from Dorothee Cresswell. "Can you once again please remind us of the BEV launch schedule for the EX30 and the EX90? EX30 starts production in Q3, and the first customers will receive those cars towards the end of Q4. Small volumes in 2023, and then we will be in full production at the start of 2024, and we'll start to see that ramp up very quickly through the course of 2024. We expect to be building the EX90 in, around the mid-year, and the deliveries will happen shortly thereafter. That will start its production life. The EX90 will start its production life in our Charleston facility in the U.S., and the first customers to receive those will be in the U.S. as well. Basically it will roll out the factory and hopefully into the hands of the first customer in the U.S.A. in the mid, in the mid part of next year. Let's take one more question from Dorothee. She asked: When will we see the cash out associated with your Chinese JV stake going from 50%- 80%? When do you expect to end up at 100%? We expect the first transaction happen into the second half of 2023. The next phase then, potentially probably into 2024. Okay. Another caller then. We have a Daniel Schwarz from Stifel. Good morning, Daniel. Please go ahead with your question. Thank you. Now I had a follow-up question on the BEV profitability. As you just said, for many BEVs, you have a very long lead time. The BEVs that had a 3% gross margin in the second quarter, could you say when you did sell these cars, is it a couple of quarters ago? And would you say that due to the time gap between orders and delivery, and the start of delivery of the more profitable EX30 in the Q4 and then in 2024, should pricing for BEVs not first deteriorate in Q3 before it starts getting better in Q4 and beyond? My second question would just be for clarification on the working capital. The SEK 9 billion in other working capital flows, that is not related to our bay, could you say what were the main drivers here? Similarly, the SEK 3.8 billion outflow from change in provision, what was driving that, and is that offsetting a positive earnings impact in the second quarter? Thank you. Hey, Daniel. On the BEV side, we're pretty confident that the 3% gross margin that we showed for this quarter, for Q2 rather, was the low point of our BEV margin. Lithium prices are coming down. The new prices that we've put into the market are taking effect. The model year 2024 gives us some pricing power because that has a much higher range due to the efficiency of the batteries and the e-motor and inverter modules. All of that alludes to us assuming or calculating that our BEV margins are gonna improve in Q3 and in Q4. Of course, as we get into 2024, with volume of the EX30 at 15%-20% gross margin, we'll see it improve again further. Maybe just a last comment on that, the XC40 and the C40 were built on a hybrid platform. They weren't designed and built for BEV efficiency. The XC90 and the EX90 and the EX30 are built on specific platforms to drive higher gross margins in BEV. Whilst we'll see the improvements in the C40 and the XC40 as lithium comes down and pricing comes in, it's unlikely to match the same gross margins as the EX30. On the cash flow, the main change in at the working capital in general, if you will, is on the back of the increased production and increased sales, which is then due to different kind of sales-related accruals, dealer incentives, et cetera. That is, of course, increasing on the back of of the increased volumes, if you will, and the change in provisions. I can come back maybe of this with some further details, but one thing is that we have done provisions, increased, putting money into our pension trusts, which then, of course, is more or less a movement between assets because it reduces the pension liability. That is one part of that. Claims. Yeah. There was one more question on the, on the outflow, in provision of SEK 3.8 billion. Yeah, that was the pension. Which was the effect of that. Yeah, exactly. Hope that answers. Again, if you want more details, we can come back offline with further details on that, more in detail. Yeah. Great, thank you. Another caller, and that is Pushkar Tendolkar from HSBC. Good morning, Pushkar. Please go ahead. Hey, hi. Good morning, and thanks for taking my question. I have only one left, and that's on the pricing. In your EBIT bridge, the SEK 1.8 billion that you show in the EBIT bridge, can you break that up into mix and pricing? Just a follow-up on that, whether all the negative pricing in that is coming from the BEV side, or do you also see softening on the non-BEV side as well? Yeah. Thank you. I can answer that. It's the to the largest part, it's not pricing, if you will. You could say it's a normalization of mix due to... I mean, we have a very much improved production situation, and we have a long order book, which means, I mean, in the supply constraints we have had historically last year on lower volumes, we have, of course, prioritized, you could say, certain cars, which means that we see a normalization of the mix, which has an effect. We also see, of course, an increased BEV share, and in the quarter, as we have discussed, the BEV profitability is lower. I would say from a pricing or I get the mix effect, that also have an effect. It should not be read as if we have any general pricing pressure. It's more BEV and variant and car line mix effects. Mm-hmm. All right. Thank you. Let's take a question online then, this comes from Gemma Almecija. "Some of your peers have raised renewed concerns around the risk of chip shortage. Mm-hmm. Are you concerned now, especially given China's restriction on gallium and the impact on the chips supply? Jim, if you wanna take that. No, as I said, we don't see that on the horizon right now, so I, you know, I read the reports the same as everyone else, and we keep pretty close to that. The relationship that we're building up with the semiconductor companies directly is helping us understand that, and it's helping us with information, it's also helping us with supply. At this point in time, we don't see the need to signal specific shortages on semiconductors. Yeah. There will still be areas here and there, where we need to get into the spot market and buy those. That's gonna be on an exception basis. When we compare it to last year, you know, it's probably somewhere in the magnitude of 10% of the issues that we see this year compared to last year. Just to frame that up, maybe that helps. Yeah. Let's take another follow-up from Gemma, and maybe you can take this, Johan. You have EUR 600 million in early 2024 maturities. Thoughts on refinancing, please? Do you plan on using cash on balance sheet or refinance with the bonds market? As I say, we have maturities coming up in 2024 and also in 2025. We are continuously evaluating funding options, so I will not exclude that we'll do an external funding when we approach these maturities, but there are no specific decisions made at this point. Okay. Another caller then, and this is Hampus from Handelsbanken. Good morning, Hampus. Hello P lease go ahead. Can you hear me? Yes, loud and clear. Go ahead. Go ahead. Thank you very much. I was a bit late on the call, so I apologize if I'm asking questions that have already been asked. My first question is on the shortages and the agreements you signed on the semi side. Where do you think you are in terms of production compared to demand? Is there a big gap here in terms of what you could potentially deliver and what you are delivering? That's my first question. Second is on the back of the software issues on the EX90. Is that solved now? Maybe last, I would like to get some more flavor on the rollout on the U.K. market. What lessons you learned and how that is proceeding? Thanks. Deliveries. Our output is up 50% year-over-year when you compare Q2 this year to Q2 last year, that's in line with where we wanted to be. Again, that's driven by obviously the lack of turbulence that we see in the market compared to last year. We don't have to deal with the COVID situation, which was a big problem for us last year. We don't need to really deal with the supply chain issues around semiconductors. By and large, that's a, you know, that's a fragment of where it was last year as well. There was a few other things that was last year as well. Most of those problems have been solved. We look like we have a pretty good run to the back end of this year in terms of supply versus demand. Again, we signaled earlier in the year, we expect to see strong double-digit growth, 2023 versus 2022, and we stand by that. We think we have a pretty clear view to achieve that strong double-digit growth. Hopefully that answers the question on deliveries. EX90 software, yeah, we pushed that out. As I mentioned just earlier on the call, we pushed that out because we're writing a lot of that software ourselves, specifically around LiDAR and the safety stack, with our, with the company that we own 100%, called Zenseact. We wanted to make sure that the first time we put LiDAR into our safety stack, we wanted to make sure that it was operating the way it should, and we wanted to give the engineers a little bit more time to get that done. That is on schedule for when we signaled that we'd start production mid next year, and we're still on for that. The last question was- Lessons learned from the U.K. The U.K., the U.K. flip and the U.K. transformation. General answer is it has gone very well. It's well received by the customers and of course it's quite early, but we will say that both from a commercial perspective and, let's call it from a technical or digital perspective, it has gone very well and more or less in accordance with plan, without any disturbances of any significance. Let me just add a little bit more color to that. What I think we did well, 'cause some other people obviously had tried to take their business digital. We took a slightly different approach in that we felt we had to get all of the stakeholders involved in the same conversation and everybody connected digitally. Of course, there's ourselves, there's our customers, there's our dealership, but we also included the aggregators in the U.K., so people like Carwow and Autotrader and so on. That, I think really that's, to my knowledge, that's the first time that's really been done. If you look at, say, Carwow in the U.K., 28%, 29% of every secondhand car sold in the U.K., goes through the Carwow channel, about 13% or 14% of new cars. If you don't include the aggregators in that conversation, it doesn't work as effectively as it should work. What we're finding is by bringing those four parties together, the customer, the dealers, the OEM, Volvo in this case, and the aggregators, everybody gets part of the same conversation, and you get a much nicer experience for the customer on an omnichannel, in an omnichannel environment. Okay, thank you. Thank you. Hope that answers. Thank you very much. ... All the questions. We're still getting a lot of questions, so let's keep this going. This comes in from Odell Nurmatov. Will the Košice construction timing be kept or will it be delayed? The, as we have said, the ambition is that we should start production in 2026. Yeah. That's. That's it. Still, that still stands. Yeah. There's nothing that we see right now that. No ...... Potentially delay that. Again, just to reiterate that will be only electric car. It will start off, the whole site will be carbon neutral from the get-go. It will be only electric cars that we build there. The initial piece, the initial build will allow us to do 250,000 fully electric cars, we have enough land there that we could increase the output of that facility should we, should we choose to do so. So far, everything's on track. Yeah, I mean, I think you've already answered the next question, but still let's take it 'cause it's coming up a few more times. Again, from Odell: How positive are you with regards to the easing on the supply shortage, semiconductor shortage, and production increase going into the second half? Listen, supply chains are complex. They come from various parts of the world. You are always gonna have. I did, you know, I did a lot of work in early in my career on supply chain. You are always gonna have some bushfires that you need to deal with in supply chain. You deal with them through maybe going out to the spot market, dealing with the distributors, you know, making sure that you've got the right relationships with the semiconductor people in this case. Also putting on top of that an analytical layer that allows you to do what-if scenario planning and real detailed analytics around your entire supply chain. We're doing all of that. There's that to say that there won't be issues. Of course, there'll be issues. Do I think that the issues that we see right now, are gonna meaningfully cause us to miss our production targets? We don't see that at this particular point in time. Yeah. One more caller then, and that's Stephanie Vincent from Bank of America. Hi, Stephanie, please go ahead. Hi, thank you so much for taking my questions. Just on the EX30 that you speak about, creating new platform, just wondering what sort of run rate you'd like to get to get to those targeted margins, and how much is improved mix and trim part of that, would be helpful to know. My second question is just on your group inventories and independent dealer inventories, where do they stand versus Q1? That would be helpful. ... Yeah, I'll let you do them. Let me do the. EX30, yeah, really excited about this car. I think this takes us to a new demographic, so I think we open up our supply, our customer base with this car. We'll offer this car as well on subscription in certain markets, which I think will further deepen our engagement with some new customers, specifically around that younger demographic. We're going to offer this car basically with two different battery types, so you'll be able to get this on a high-performance NMC battery, as well as a LFP battery, which allows us to bring down the cost of that. We'll offer this in different sizes, so that you get different range. Again, that helps with the cost base. It really allows the customer to choose, and we'll offer it in a twin and a single motor version. We'll offer it in five different colors, and we'll offer it in four different interiors. We think that the difference between the LFP, the NMC, the twin, the single, the colors, the choices, that we're... Everything that's coming back at us right now suggests that we've got this a bit right. We think this will be a high volume car for Volvo in 2024 and beyond. Mm-hmm. On inventory? On inventory levels, I mean, we are increasing inventory in Q2. I mean, for several reasons. One is, I mean, we are coming from an environment for quite some time with very low inventory levels, too low inventory levels, both in our own books and at the dealers. Secondly, we are in a process of really increasing production and growing volumes, which by definition increases inventory slightly. There are also cars in transit, et cetera, et cetera. Of course, wholesale come before retail sales, which means that you also see an increase of dealer inventory to some extent. Further, it's a normal seasonality into this as well. We typically build up some inventory in the second quarter before the closures of the European plants over vacation time, et cetera. The answer is, we are building up some inventory in the second quarter, full accordance with plan, and we are on healthy levels. All right. Thank you. Let's take two questions online, both from Tom Narayan, and I'll read them out one by one quickly. Despite the higher CapEx period, is getting to investment grade ratings a priority over the near term? Maybe take that, and I'll take the other. Yeah, I think, I mean, we are aiming to deliver on our ambitions, both when it comes to growth and profitability, and I think if we do so, that will, of course, have a positive effect also from other perspectives, potentially from a rating perspective, et cetera. Mm-hmm. I mean, the main focus is to really deliver on our ambitions as a company. Mm-hmm. A follow-up, can you comment on your minimum liquidity requirement from a day-to-day operations? We don't guide on specific levels on minimum liquidity. We think we are at a healthy liquidity level. Okay. This one comes in from Jussi Pynnönen. When can you make fully electric cars as profitably as fossil fuel cars, if ever? Yeah, if you go back to, if you take that top end of the range that we gave on the EX30, 15%-20%, if you take the top end of that range, then you're already there. Mm-hmm. I think that kinda answers that question. Is it achievable? Absolutely. When you can offer the technologies that we can offer already, which is LFP batteries, when we improve energy density within the battery, when we improve, as we've done with the e-motors, and you can get more range, that allows you then to take batteries out for the same range, which means you can take cost out, which means you can improve margin. As you get more and more leverage on the fully electric supply chain, again, you get a reduction in your BOM costs, and that drives up margin as well. I think we are already there. Mm-hmm. The EX30 will be a great proof point to that. All right, I think on that note, I think we're getting some questions, but I think we've already answered most of them. I think with that, we should wrap this analyst and media live stream. Jim, Johan, John, thank you for your time, and thank you everyone for your questions. If you think of more, our phone lines are open, so reach the investor relations team or the media relations team, and we'll be back with you with answers shortly on that. From all of us here, thank you and have a great day ahead. Goodbye. Thank you. Thank you.