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The biggest European carmaker, Volkswagen Group, saw its profit decline sharply in the first six months of 2025; the operating result came in at €6.7bn, 33% lower than a year ago. Sales revenue was roughly in line with the previous year’s, at €158.4bn.
According to the company’s statement, the decline in income stemmed from increased US import tariffs, restructuring measures that cost €700 million and higher sales of lower-margin all-electric models.
“Excluding these items, the operating margin in the second quarter is at nearly 7%, representing the upper end of our expectations,” said Arno Antlitz CFO & COO at Volkswagen Group.
Europe’s largest carmaker is under pressure to cut costs as its net cash flow came in at -€1.4bn for the first six months of 2025.
Volkswagen’s share price was up by more than 3% around midday on Friday in Europe.
Sales remain stable, and EVs could bring relief
Due to the increased tariffs, sales in the US dropped sharply by 16%, but a 19% growth in South America, solid figures in Western Europe (+2 %), as well as Central and Eastern Europe (+5 %) compensated for this.
Overall, new car sales in the EU dropped by 1.9% in the first half of 2025, year-on-year, according to the European Automobile Manufacturers’ Association (ACEA). Volkswagen’s overall sales in this period increased by 2.3% in the bloc, led by Volkswagen, Skoda and Cupra models.
The car maker reported that order intake for EVs increased by 62%.
“In Europe, we expanded our leading position in electric mobility, with a market share of 28% and order books remain well filled,” said the CEO, Oliver Blume.
What is in the cards for Volkswagen?
The German carmaker updated its financial guidance for investors, adding that it expects sales revenue to be in line with the previous year’s figure, instead of the +5% they previously projected.
The operating return on sales is now expected to fall between 4% and 5%, down from 5.5% to 6.5%. The most pessimistic scenario assumes that US tariffs of 27.5% will continue to apply in the second half of 2025, the optimistic forecasts refer to US tariffs reduced to 10%. “There is high uncertainty about further developments with regard to the tariffs, their impact and any reciprocal effects,” read the statement.
The European Union and the United States are currently negotiating a trade agreement to settle tariffs between the countries before the 1 August deadline. Washington threatened the EU with 30% tariffs if there is no deal by that day. Meanwhile, the EU has also prepared its own countermeasures to deploy if the time comes.
“We are counting on the European Commission and the US government to reach a balanced outcome on the tariff issue,” said the CEO of Volkswagen on a call on Friday.
