STOCKHOLM 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 electric vehicles (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 volumes growth of at least 15%," chief executive officer Jim Rowan said in a statement.

Volvo Cars said on Wednesday that its operating income excluding joint ventures, associates and one-offs rose 8% to 6.8 billion Swedish crowns (US$629.27 million) in the quarter, from a year-ago's 6.3 billion Swedish crowns.

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 battery-electric vehicles' (BEVs) gross margin was 16% in the quarter, a rise from the previous quarter's figure of 13%, underpinning Rowan's firm stance that its margins will continue to rise.

  - Reuters