The Volkswagen Group has released its Half-Year Financial Report for 2025, revealing a stable sales volume but a 33% drop in operating profit amid a landscape of geopolitical uncertainty, rising U.S. tariffs, and internal restructuring.
Despite the challenges, Group CEO Oliver Blume remained optimistic, citing strong product momentum, especially in Europe’s electric vehicle (EV) market, where the company holds a 28% market share.
Driven by the success of our new products, we held our ground in an extremely challenging environment,” Blume said. “We’ve made major strides in design, quality, and software — and expect continued growth in the second half.
Key Financial Highlights – H1 2025 vs. H1 2024
- Sales Revenue: €158.4 billion (–0.3%)
- Operating Result: €6.7 billion (–33%)
- Operating Margin: 4.2% (vs. 6.3%)
- Net Cash Flow (Automotive Division): –€1.4 billion (vs. +€0.4 billion)
- Vehicle Sales: 4.36 million units (+0.5%)
🇺🇸 Tariffs and Restructuring Drag on Profits
CFO & COO Dr. Arno Antlitz attributed the decline in profitability to a combination of €1.3 billion in U.S. import tariffs, €0.7 billion in restructuring costs, and a product mix shift toward lower-margin EVs.
We’re on the right track operationally, but what really matters is cash in the bank,” Antlitz said, underlining the Group’s renewed push for earnings optimization and liquidity discipline.
Excluding one-time impacts, the Q2 operating margin reached nearly 7%, placing it at the upper end of revised expectations.
Global Market Dynamics
Volkswagen saw mixed regional performance:
- Western Europe: +2% sales growth, +19% order intake, led by strong EV demand (+62%)
- South America: +19% sales growth
- China: –3% sales decline
- North America: –16% sales decline, heavily impacted by tariffs
Brand Group Highlights
- Core (VW, Škoda): Operating margin at 4.8%, with Škoda posting a record quarterly result
- Progressive (Audi, CUPRA): Margin fell to 3.3% due to restructuring and model transitions
- Sport Luxury (Porsche): Sales down 11%, margin dropped to 5.2% amid battery-related charges
- CARIAD: Revenue up 30%, losses flat at –€1.2 billion
- TRATON (Commercial Vehicles): Revenue –7%, operating profit –39% due to weak demand
Investment, Outlook, and Strategy
- Investment Ratio (Auto Division): Expected between 12–13% for FY2025
- Net Liquidity Forecast: €31–33 billion
- Full-Year Operating Margin Outlook: Revised to 4.0–5.0% (previously 5.5–6.5%)
- Sales Revenue Outlook: Flat (previously expected up to +5%)
The Group highlighted U.S. tariff policy as a key swing factor in H2 2025 forecasts. Current tariffs stand at 27.5%, and the company expects differing financial outcomes based on whether rates remain or are reduced to 10%.
Challenges Ahead
Volkswagen warned of ongoing headwinds, including:
- Geopolitical tensions
- Expanding trade restrictions
- More stringent emissions standards
- Commodity and FX volatility
- Heightened competition in the EV sector
Despite this, the Group reaffirmed its commitment to transformation, aiming to reduce its investment ratio to around 10% by 2027 and remain at the forefront of digital and sustainable mobility.
