Volvo Cars reported operating profits of 14.1 billion kronor ($1.76 billion) last year, a 27.7 percent increase on the year before.
Net revenue increased to 210.9 billion, up by 16.6 percent on 2016, said the car maker.
Volvo also achieved its fourth straight year of record sales with more than half a million cars sold around the world, with the Asia-Pacific market leading the charge, as The Local has previously reported.
“Our business has transformed completely since 2010 and we are now gearing up for a phase of global, sustainable growth,” said president and CEO Håkan Samuelsson in a statement.
“We are investing in all parts of our organization and have laid out clear strategies around electrification, autonomous drive and connectivity.”
Volvo Cars plans to equip all new cars with an electric motor from 2019, making it the first of the world's traditional car makers to pull the plug on cars powered only by a combustion engine.
Last year it announced it had signed a deal with Uber to supply “tens of thousands” of self-driving cars to the ride-sharing company between 2019 and 2021.
Founded in Sweden in 1926, Volvo Cars is owned by Chinese Geely Holding. It is headquartered in Torslanda, Gothenburg, and has a factory there as well as in Ghent, Belgium, and Chengdu, China.