Volkswagen profits tumble as tariffs weigh on auto industry

The carmaker joins Stellantis and GM successful reporting hits to their profits arsenic tariffs thrust up costs for the industry.

Volkswagen has reported $1.5bn successful losses successful the archetypal fractional of the twelvemonth due to the fact that of tariffs imposed by United States President Donald Trump.

The German carmaker reported a deed arsenic the institution revised its afloat twelvemonth income and nett borderline forecasts.

Volkswagen, Europe’s biggest carmaker, present expects this year’s operating nett borderline to beryllium 4 percent to 5 percent, compared with a erstwhile forecast of 5.5 percent to 6.5 percent. Full-year sales, earlier seen up to 5 percent higher, are expected to beryllium level with the erstwhile year.

Investors had mostly anticipated a guidance chopped aft the institution held disconnected connected assessing the harm from tariffs successful the erstwhile quarter and appeared calmed by assurances that the group’s luxury brands Audi and Porsche would retrieve adjacent twelvemonth aft dense losses successful the 2nd quarter.

CEO Oliver Blume told investors the institution indispensable accelerate its cost-cutting efforts successful effect to the tariffs.

“We request to displacement our outgo efforts into precocious cogwheel and accelerate implementation. After all, we cannot presume that the tariff concern is lone temporary,” Blume said.

Global carmakers person booked billions of dollars successful losses and immoderate person issued nett warnings owed to US tariffs. The European manufacture is besides facing stiffening contention from China and home regulations aimed astatine speeding up the electrical conveyance transition.

Tariff hit

Volkswagen is the 3rd automaker this week to study a deed to their profits due to the fact that of tariffs. Michigan-based General Motors reported that tariffs outgo it $1.1bn successful the 2nd quarter. Stellantis, the shaper of brands including Jeep and Fiat, reported a $2.7bn nonaccomplishment for the archetypal six months of 2025.

VW and its competitors are pressing European commercialized negotiators to onslaught a woody to reduce a 25 percent US tariff they person faced since April.

EU diplomats person indicated that the bloc could beryllium moving towards a wide 15 percent tariff arsenic it seeks to debar a threatened 30 percent levy from August 1. A woody struck betwixt the US and Japan this week raised hopes for a akin statement for Europe, boosting carmakers’ shares.

VW concern main Arno Antlitz said Volkswagen’s nett borderline would onshore astir successful the mediate of its guidance with a Japan-style deal, which had a 15 percent tariff rate.

He warned, however, that the timepiece was ticking connected uncovering a deal. “We are already successful July, truthful the longer we spell into the 2nd fractional of the year, the much we thin to the little extremity of the guidance,” helium said.

Antlitz declined to remark connected terms increases erstwhile pressed by investors connected however the institution planned to support its margins against tariffs.

Volkswagen reported an operating nett of $4.4bn (3.8 cardinal euros) successful the 4th ended June 30, down 29 percent connected the erstwhile year. It cited tariffs and restructuring costs for the diminution arsenic good arsenic higher income of lower-margin all-electric models.

While Volkswagen was capable to boost deliveries globally by 1.5 percent successful the archetypal six months of 2025, the radical saw a diminution of astir 10 percent successful deliveries to the US.

North American income gross accounted for 18.5 percent of the carmaker’s planetary income successful the archetypal half.

Car income information for June highlighted a broader slowdown successful Europe’s struggling car assemblage – and showed Volkswagen among the laggards arsenic the institution undergoes a large overhaul to chopped much than 35,000 jobs by the extremity of the decade.

Porsche and Audi are peculiarly exposed to US tariffs fixed they person nary accumulation determination and trust heavy connected exports.

In the 2nd quarter, Porsche’s operating effect plunged by much than 90 percent to 154 cardinal euros ($181m) and Audi’s by 64 percent to 550 cardinal euros ($647m).

“For some companies, Audi and Porsche, we are expecting that we volition interaction the bottommost this twelvemonth with affirmative momentum from 2026 onwards,” Blume said.

Despite the losses, VW’s banal is connected the upswing. As of noon successful New York (16:00 GMT), it was up much than 3 percent since the marketplace opened and up much than 12 percent implicit the past 5 days successful trading.

The stocks of different carmakers that besides reported tariff hits are trending upwards. Stellantis is up 3.9 percent for the day. GM is astir adjacent – up by lone astir 0.2 percent.