Volkswagen Group profits down 29% in first six months of 2025

The Volkswagen Group reported a significant decline in operating profit in the first half of 2025, reflecting the challenging market environment shaped by U.S. import tariffs and ongoing workforce restructuring efforts.

Financial Results Overview:

• The Group’s operating profit for the first half of 2025 stood at €6.7 billion, down 33% compared to €10.0 billion in H1 2024.

• In the second quarter alone, operating profit fell by 29.4% to €3.83 billion, resulting in an operating margin of 4.2% for the half-year.

• Total sales revenue receded slightly by 0.3% to €158.4 billion in the first half, with quarterly revenue in Q2 dropping 3% to €80.8 billion.

• Earnings after tax declined sharply by 36.3% in Q2 to €2.3 billion, highlighting margin pressures.

• Despite these financial headwinds, Volkswagen reported a modest growth in vehicle deliveries, with customer deliveries rising 1.3% to 4.4 million units in H1 2025 and a 1.2% increase in Q2 customer deliveries year-on-year.

Key Challenges Affecting Results:

• Import tariffs imposed by the United States on European-made vehicles cost the Group an estimated €1.3 billion in Q2 2025 alone.

• CEO Oliver Blume noted that the company “cannot assume the tariff situation is temporary,” signaling ongoing uncertainty and potential risk to profitability.

• Restructuring charges and provisions related to workforce realignment at Audi, Volkswagen Passenger Cars, and software unit Cariad accounted for an additional €0.7 billion charge during the quarter.

• The Group also faced negative mix effects due to stronger sales of lower-margin electric vehicles, currency headwinds, and costs related to CO₂ regulations.

Operational Highlights:

• Volkswagen maintained sales volume resilience with production around 4.5 million vehicles in H1, although production declined slightly (down 1.9%) compared to the previous year.

• The employee headcount was reduced by 1.8% to approximately 667,000 as part of ongoing efficiency and restructuring measures.

• The Group’s operating margin excluding tariffs and restructuring would have been near 7% in Q2, indicating core business resilience beneath the external cost pressures.

Outlook and Strategic Focus:

• Volkswagen lowered its FY 2025 outlook, now expecting sales revenue to be broadly flat year-over-year rather than growing by up to 5% as previously anticipated.

• The operating margin forecast was trimmed to a range of 4.0% to 5.0%, down from previous guidance of 5.5% to 6.5%.

• CEO Blume emphasized a continued focus on product innovation, electric mobility leadership in Europe (holding a 28% market share), software development, and cash generation.

• The Group aims to accelerate earnings improvement programs to offset tariff and restructuring costs.

Summary Table: Volkswagen Group Key Figures for H1 and Q2 2025

Volkswagen Group’s 2025 first half results indicate a period of profit pressures mainly from external tariffs and restructuring, despite solid sales volume and continued leadership in electric mobility in key markets.