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

Uptick in demand for less profitable electric cars also weighed on VW Group's margins US tariffs cost the group €1.3bn in Q2 alone, while sales of less profitable EVs dented margins further The Volkswagen Group’s operating profit fell by 29% in the first half of 2025 off the back of the impact of tariffs on US imports and the restructuring of its workforce. US import tariffs cost the VW Group €1.3 billion (£1.13bn) in the second quarter of 2025 alone and CEO Oliver Blume said it “cannot assume the tariff situation is temporary”. The group’s operating profit figure of €3.83bn for the first half of 2025 resulted in an operating margin of 4.2%. If not for the impact of tariffs and an ongoing project to restructure the business, the margin would have been 5.6%. In Q2, it was even more stark: a margin of 6.8% declined to 4.7%. Blume (below) said these latest financial results are also the first to show the impact of its cost-cutting plans. Some 4000 Volkswagen employees have left the business since December and another 20,000 have deals in place to leave. The goal is to cut costs by €4bn (£3.5bn) per year at VW alone, said Blume, and plans were also locked down to reduce the headcount at Audi by around 7500 people by 2029 and around 3900 at Porsche by the same date. Margins were also hit at the VW Group by the increased popularity of its electric cars, which have lower profit margins due to their higher costs. Battery-electric vehicle (BEV) sales were up 47% for the company in Europe year on year and now account for one in five VW Group sales in Europe. Order intake of BEVs grew 62% in this period, showing increased momentum for the group here. Globally, BEVs accounted for 11% of total sales. Across the VW Group’s ‘Core’ brands – Volkswagen, VW Commercial Vehicles, Skoda, Seat and Cupra – sales rose 1% year on year. Individually, VW sales were flat in the first half of the year at just over 1.5 million units, while Skoda posted a 6% increase, at 582,000 units. Sales at its ‘Progressive’ brands – Audi, Lamborghini, Bentley and Ducati motorcycles – rose 7% to 574,000 units. Porsche sales dropped 11% to 135,000. Overall deliveries at the VW Group worldwide rose 1% to 4.4m units, driven by growth in Europe and South America. In the US, sales in the first half of 2025 were down 7% but in the second quarter the drop was 16% as the impact of tariffs bit. In China, sales fell 2% but Blume is confident the new ‘in China, for China’ strategy around developing models exclusively for the market will be felt from the end of this year, when a new era of VW Group ‘NEVs’ (new energy vehicles) will start to hit the market. A total of 30 NEV models will launch by 2027 and 50 by the end of the decade. This strategy has included the reworking of the group’s compact China-only platform for BEVs to take 40% off its costs to make it cost-comparable to architectures from local manufacturers.

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