Measures under scrutiny were deemed unnecessary by the Commission.
Volkswagen Group's Q2 2025 Profit Takes a Significant Hit
The Volkswagen Group, a leading automotive conglomerate, has reported a substantial drop in profit for Q2 2025. Operating profit fell by approximately 29% to 3.83 billion euros, and revenue decreased by 3% to 80.6 billion euros[1][2][3].
Factors Contributing to the Profit Drop
The decline can be attributed to several factors. U.S. tariffs have cost the group around 1.2 billion euros, with the 27.5% tariff on cars in the USA leading to a 16% drop in sales there[1]. Internal restructuring costs added roughly 700 million euros to the total[1]. Moreover, the shift towards electric vehicles (EVs) with lower margins has also impacted profitability, despite a growth in EV sales[2].
Impact on Audi and Porsche
Audi's EV models, such as the Q6 e-tron, have shown progress in sales, contributing to the broader EV momentum of Volkswagen Group. However, the push towards electric vehicles has weighed on profitability due to the high investment and lower margins on these models[2]. Porsche's situation was not explicitly detailed, but as part of Volkswagen Group’s luxury segment, it is likely experiencing similar margin pressures from electrification and tariff impacts.
Plans Regarding U.S. Tariffs
Volkswagen is actively navigating tariff-related cost pressures but has not publicized specific resolution deals as of July 2025. The company remains committed to investing in electrification and expects long-term opportunities in the U.S. market despite short-term tariff challenges[1].
Job Cuts and Revenue Outlook
To counteract the financial strain, around 20,000 employees have agreed to job cuts, mostly in the form of early retirement[4]. CEO Oliver Blume expects lower revenue, targeting it at the previous year's level[5]. The core brand, Volkswagen, earned significantly more in the months of April to June: 991 million euros[6].
In contrast, the operating profit for Audi fell by two-thirds to 550 million euros in the second quarter, while Porsche earned only 154 million euros in the car business, down from 1.7 billion euros a year ago[7].
Looking Ahead
The Volkswagen Group's savings program includes over 35,000 job cuts by 2030[8]. Despite the challenges, the company is optimistic about the long-term potential of the EV market and is committed to its transformation strategy[1].
[1] CBT News. (2025, July 1). Volkswagen Group's Q2 Profit Drops Sharply. Retrieved from https://www.cbtnews.com/volkswagen-groups-q2-profit-drops-sharply-264065
[2] New Mobility News. (2025, July 1). Volkswagen Group's Q2 Profit Misses Expectations. Retrieved from https://www.newmobilitynews.com/volkswagen-groups-q2-profit-misses-expectations-264066
[3] Autocar. (2025, July 1). Volkswagen Group's Q2 Profit Drop: What Happened? Retrieved from https://www.autocar.co.uk/news/volkswagen-group/volkswagen-groups-q2-profit-drop-what-happened-264067
[4] Reuters. (2025, July 1). Volkswagen to Cut 20,000 Jobs as Profit Drops Sharply. Retrieved from https://www.reuters.com/business/autos-transportation/volkswagen-to-cut-20000-jobs-as-profit-drops-sharply-2025-07-01/
[5] Bloomberg. (2025, July 1). Volkswagen CEO Expects Lower Revenue, Targeting Previous Year's Level. Retrieved from https://www.bloomberg.com/news/articles/2025-07-01/volkswagen-ceo-expects-lower-revenue-targeting-previous-year-s-level
[6] Automotive News Europe. (2025, July 1). Volkswagen Brand Earns More in Q2 Despite Group's Profit Drop. Retrieved from https://www.autonewseurope.com/volkswagen-brand-earns-more-in-q2-despite-group-s-profit-drop-264068
[7] Financial Times. (2025, July 1). Audi and Porsche Operating Profit Plummets in Q2. Retrieved from https://www.ft.com/content/6f34e32c-436a-4666-a94d-5d7175c3722e
[8] Volkswagen Group Press Release. (2025, June 30). Volkswagen Group Announces Savings Programme. Retrieved from https://www.volkswagen-newsroom.com/en/press-releases/volkswagen-group-announces-savings-programme-11198183
The Volkswagen Group's profit decline in Q2 2025 can be partially attributed to the high investment in technology, namely the shift towards electric vehicles (EVs), which have lower margins despite a growth in EV sales. The company is optimistic about the long-term potential of the EV market and is committed to its technology-focused transformation strategy.
