Volkswagen Group Cuts Profits Despite Stable Sales and Growth in Electric Vehicles

Volkswagen Group has released its financial results for the first half of 2025, revealing a mixed outlook in an "extremely challenging" global environment. Although vehicle sales remained stable and the company advanced its electrification strategy, operating profit was significantly impacted by both external and internal factors.

The Group's operating result reached €6.7 billion, representing a 33% decline compared to the €10 billion achieved in the same period of 2024.

This decrease is primarily attributed to high costs from increased import tariffs in the U.S. (€1.3 billion), provisions for restructuring at Audi, Volkswagen Passenger Cars, and Cariad (€700 million), and expenses related to CO₂ regulations. Additionally, a negative mix effect due to a higher proportion of fully electric vehicle sales, which currently have a lower margin, also influenced the result. Excluding tariffs and restructuring, the operating margin would be close to 7%.

Despite the profit contraction, sales revenue remained almost in line with the previous year, reaching €158.4 billion (compared to €158.8 billion in the first half of 2024). Vehicle sales slightly increased to 4.36 million units, surpassing the 4.34 million from the previous year.

This growth was driven by South America (+19%), Western Europe (+2%), and Central and Eastern Europe (+5%), offsetting expected declines in China (–3%) and, mainly due to tariffs, in North America (–16%).

Oliver Blume, CEO of Volkswagen Group, highlighted the strong performance of its new products and progress in design, technology, quality, and software. "In Europe, we expanded our leadership position in electric mobility, with a market share of 28%, and the order book remains well-filled," Blume stated, expecting the positive trend to continue in the second half of the year.

Meanwhile, Arno Antlitz, CFO and COO of Volkswagen Group, acknowledged the contrasting outlook. "What really matters is the cash in the bank. That's why we must continue with our profit improvement programs and accelerate the pace where necessary," Antlitz noted, referring to a negative automotive net cash flow of -€1.4 billion in the semester, affected by acquisitions (including shares in Rivian) and restructuring and tariff costs.

Looking towards the end of 2025, Volkswagen Group has adjusted its forecasts. They now expect sales revenue to remain in line with the previous year (compared to a previously anticipated increase of up to 5%), and an operating return on sales between 4.0% and 5.0% (previously between 5.5% and 6.5%).

These downward projections consider the uncertainty over the continuation of U.S. import tariffs and a global environment characterized by political instability, trade restrictions, and increasing competition intensity, as acknowledged by the automotive group.