The carmaker joins Stellantis and GM in reporting hits to their income as tariffs drive up prices for the business.
Volkswagen has reported $1.5bn in losses within the first half of the yr due to tariffs imposed by United States President Donald Trump.
The German carmaker reported successful as the corporate revised its full yr gross sales and revenue margin forecasts.
Volkswagen, Europe’s largest carmaker, now expects this yr’s working revenue margin to be 4 p.c to five p.c, in contrast with a earlier forecast of 5.5 p.c to six.5 p.c. Full-year gross sales, earlier seen as much as 5 p.c greater, are anticipated to be degree with the earlier yr.
Traders had largely anticipated a steering reduce after the corporate held off on assessing the injury from tariffs within the earlier quarter and appeared calmed by assurances that the group’s luxurious manufacturers Audi and Porsche would get better subsequent yr after heavy losses within the second quarter.
CEO Oliver Blume informed buyers the corporate should speed up its cost-cutting efforts in response to the tariffs.
“We have to shift our price efforts into excessive gear and speed up implementation. In any case, we can’t assume that the tariff scenario is just momentary,” Blume mentioned.
International carmakers have booked billions of {dollars} in losses and a few have issued revenue warnings as a consequence of US tariffs. The European business can be dealing with stiffening competition from China and home laws aimed toward dashing up the electrical car transition.
Tariff hit
Volkswagen is the third automaker this week to report successful to their income due to tariffs. Michigan-based General Motors reported that tariffs price it $1.1bn within the second quarter. Stellantis, the maker of manufacturers together with Jeep and Fiat, reported a $2.7bn loss for the primary six months of 2025.
VW and its rivals are urgent European commerce negotiators to strike a deal to reduce a 25 percent US tariff they’ve confronted since April.
EU diplomats have indicated that the bloc might be shifting in the direction of a broad 15 p.c tariff because it seeks to keep away from a threatened 30 p.c levy from August 1. A deal struck between the US and Japan this week raised hopes for the same settlement for Europe, boosting carmakers’ shares.
VW finance chief Arno Antlitz mentioned Volkswagen’s revenue margin would land roughly in the course of its steering with a Japan-style deal, which had a 15 p.c tariff price.
He warned, nonetheless, that the clock was ticking on discovering a deal. “We’re already in July, so the longer we go into the second half of the yr, the extra we are likely to the decrease finish of the steering,” he mentioned.
Antlitz declined to touch upon worth will increase when pressed by buyers on how the corporate deliberate to guard its margins towards tariffs.
Volkswagen reported an working revenue of $4.4bn (3.8 billion euros) within the quarter ended June 30, down 29 p.c on the earlier yr. It cited tariffs and restructuring prices for the decline in addition to greater gross sales of lower-margin all-electric fashions.
Whereas Volkswagen was capable of increase deliveries globally by 1.5 p.c within the first six months of 2025, the group noticed a decline of virtually 10 p.c in deliveries to the US.
North American gross sales income accounted for 18.5 p.c of the carmaker’s international gross sales within the first half.
Automotive gross sales information for June highlighted a broader slowdown in Europe’s struggling auto sector – and confirmed Volkswagen among the many laggards as the corporate undergoes a serious overhaul to chop greater than 35,000 jobs by the top of the last decade.
Porsche and Audi are significantly uncovered to US tariffs given they haven’t any manufacturing there and rely closely on exports.
Within the second quarter, Porsche’s working outcome plunged by greater than 90 p.c to 154 million euros ($181m) and Audi’s by 64 p.c to 550 million euros ($647m).
“For each corporations, Audi and Porsche, we predict that we’ll contact the underside this yr with optimistic momentum from 2026 onwards,” Blume mentioned.
Regardless of the losses, VW’s inventory is on the upswing. As of midday in New York (16:00 GMT), it was up greater than 3 p.c because the market opened and up greater than 12 p.c over the past 5 days in buying and selling.
The shares of different carmakers that additionally reported tariff hits are trending upwards. Stellantis is up 3.9 p.c for the day. GM is about even – up by solely about 0.2 p.c.