However, retail deliveries improved sequentially from the first quarter thanks to the strong demand for the company's fully electric cars in Europe and a modest recovery in the US.

The company reported a 14 percent growth in global deliveries of its fully electric cars in the second quarter. This performance was led by a strong momentum in its largest region, Europe, and Rest of the World, where sales increased by 25 per cent.

Including June, the company reported its ninth consecutive month of growth in fully electric car deliveries globally, boosted by strong demand for the EX30 and EX40 electric SUVs.

Despite a decline in overall sales, the company witnessed a steady increase in its retail orders in Europe during the quarter, led by robust demand for its electric cars, notably the new EX60 electric SUV. Customer orders for the small EX30 electric SUV also increased by double digits in Europe during the period.

"Overall market conditions remain challenging, specifically in China, but we are encouraged by the momentum for the fully electric cars in our largest market Europe," said Erik Severinson, Chief Commercial Officer at Volvo Cars. "We see increased deliveries and order intake for our EX30, even in less electrified South European markets. This is reflected in our higher market share in the growing electric car segments compared to traditional petrol and diesel cars."

"The EX60 will further strengthen our share in the growing fully electric segment and continues to surpass expectations with robust customer orders. We expect increased interest in the car as customers will now be able to experience it in our showrooms as we start the first deliveries. We are now gearing up to ramp up production in the second half of the year."

Overall, electrified models - fully electric and plug-in hybrid cars - represented 52 per cent of all cars sold during the quarter.

In Europe and Rest of the World, sales reached 104,259 cars during the second quarter, up by 2 per cent compared to the same period last year. Sales of electrified models increased by 8 per cent due to the strong increase in deliveries of fully electric cars. Overall, the electrified models comprised 62 per cent of all cars sold in the region.

In the Americas region, sales increased by 4 per cent to 42,630 cars, demonstrating gradual recovery in the US market for two straight months. The overall market still remains impacted by low customer sentiment, increased competition in the SUV segment and a slower than expected recovery in sales of electric and plug-in hybrid cars post subsidy removal.

In the Greater China region sales were negatively impacted by intensifying competitive pressure, regulatory changes and a weak macro environment. Deliveries stood at 24,882 cars, down 35 per cent compared to the same period last year, reflecting the broader downturn in the industry. However, sales of electrified models increased by 144 per cent to 9,909 cars, on the back of a 172 per cent jump in plug-in hybrid deliveries due to an increase in sales of the XC70 long-range plugin hybrid.