STOCKHOLM, April 27 Reuters Swedenbased automaker Volvo Cars reaffirmed its outlook on Thursday and said it saw no point in cutting prices given healthy demand as its operating earnings beat estimates.

Its shares shot up 8 at the market open before retreating to trade flat at 0736 GMT, which Bernstein analyst Daniel Roeska said could be because of some early shortcovering orders.

Automakers such as Volvo have begun slowly emerging from an extended period of supply chain pain and shortages, which have hit output and driven up costs.

The company said its manufacturing had improved, but still saw some shortages, which would continue to affect production in the second quarter.

Volvo has seen robust demand for its models, which it aims to be allelectric by the end of the decade, with unit sales up 10 in the first quarter.

Meanwhile, Tesla has doubled down on a price war begun at the end of last year to spur demand and fend off rising competition, posting its lowest quarterly gross margin in two years and jarring stocks across the industry, including its own.

Volvo, for whom fully electric vehicles EVs accounted for 11 last year, said in February it had no intention of cutting its EV prices.

On Thursday, Chief Executive Jim Rowan told Reuters that as long as demand continues to be high for the automaker, he saw no reason to cut prices.

Rowan also said lithium prices, a major source of cost for the carmaker39;s EVs, had started to decline. This was despite Chile, the…