Volkswagen Group faced a 33% decline (over H1 2024) in its operating profit to €6.7bn ($7.88bn) for the first half (H1) of 2025.
This downturn is largely attributed to the impact of increased US import tariffs, which cost the company €1.3bn ($1.52bn), alongside restructuring provisions and CO₂ regulatory expenses.
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The company’s operating margin before the tariff and restructuring costs was 5.6%, but the actual operating return on sales for H1 2025 fell to 4.2%.
Sales revenue remained stable at €158.3bn ($185.8bn) in H1 2025, closely matching the previous year’s figures.
But the automotive division saw a negative net cash flow of €1.4bn, in contrast to the previous year’s positive €0.4bn.
The decline was driven by merger and acquisition expenditures, including €0.9bn for additional Rivian shares, restructuring payments, and US tariff costs.
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By GlobalDataVehicle sales for the H1 2025 saw a slight increase to 4.36 million units compared to the previous year same period, with growth in Western Europe, South America, Central and Eastern Europe offsetting declines in China and North America. The latter was significantly impacted by tariffs, leading to a 16% decrease in sales.
The Core brand group has made strides in cost efficiency, achieving a 4.8% operating margin in the H1.
Looking ahead, Volkswagen Group has adjusted its 2025 outlook, now anticipating sales revenue to remain consistent with the prior year and projecting an operating return on sales between 4.0 and 5.0%.
The investment ratio in the automotive division is expected to be between 12 and 13%, with automotive net cash flow ranging from €1bn to €3bn.
Net liquidity is forecasted to be between €31bn and €33bn.
Uncertainties surrounding US import tariffs, currently at 27.5%, pose potential risks for H2 of 2025. The company’s forecasts consider both the continuation of these tariffs and a possible reduction to 15% (which may follow a pending US-EU trade deal).
Volkswagen Group anticipates challenges from political uncertainty, trade restrictions, competitive pressures, market volatility, and stringent emissions regulations.
Volkswagen Group COO and CFO Arno Antlitz said: “Our half-year figures present a contrasting picture: on the one hand, we achieved strong product success and made progress in realigning the company. On the other, the operating result declined by a third year-on-year – also due to higher sales of lower-margin all-electric models.
“In addition, increased US import tariffs and restructuring measures had a negative impact. Excluding these items, the operating margin in the second quarter is at nearly seven percent, representing the upper end of our expectations.”
Earlier in the month, Volkswagen Group reported a 1.2% increase in global sales for the second quarter (Q2) 2025, ending 30 June, despite ongoing tariff concerns.
