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PulseReporter > Blog > Money > Volkswagen posts 29% drop in second-quarter revenue as tariffs hit exhausting
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Volkswagen posts 29% drop in second-quarter revenue as tariffs hit exhausting

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Last updated: July 25, 2025 6:56 am
Pulse Reporter 21 hours ago
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Volkswagen posts 29% drop in second-quarter revenue as tariffs hit exhausting
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A employee performs a ultimate verify on new Volkswagen ID.3 electrical automobiles on the Volkswagen plant on Might 14, 2025 in Dresden, Germany.

Sean Gallup | Getty Photographs Information | Getty Photographs

Germany’s Volkswagen on Friday lowered its full-year steerage and reported a pointy drop in second-quarter revenue, because the auto big navigates the disruptive affect of U.S. tariffs.

Europe’s greatest carmaker posted working revenue of three.83 billion euros ($4.49 billion) for the three months by means of June, down 29% from 5.4 billion euros a 12 months in the past.

Analysts had anticipated second-quarter revenue to return in at 3.94 billion euros, in keeping with a Factset-compiled consensus.

Volkswagen reported second-quarter gross sales income of 80.8 billion euros, additionally lacking analyst expectations of 82.2 billion euros.

In a protracted awaited assessmnet of the affect of U.S. tariffs, Volkswagen mentioned its 2025 working return on gross sales is now anticipated to vary between 4% to five%, down from a earlier forecast of 5.5% to six.5%.

Full-year gross sales at the moment are additionally anticipated to return in step with the extent achieved as final 12 months, in comparison with an increase of as much as 5% beforehand.

The outcomes come as Europe’s automakers battle to familiarize yourself with a sequence of trade challenges, together with strong competitors from Chinese language automotive manufacturers and U.S. President Donald Trump‘s import tariffs of 25%.

“Our half-year figures current a contrasting image: on the one hand, we achieved sturdy product success and made progress in realigning the corporate,” Arno Antlitz, chief monetary officer at Volkswagen, mentioned in an announcement.

“On the opposite, the working end result declined by a 3rd year-on-year – additionally resulting from greater gross sales of lower-margin all-electric fashions. As well as, elevated US import tariffs and restructuring measures had a detrimental affect,” he mentioned.

Key second-quarter highlights:

  • Volkswagen reported 80.8 million car gross sales within the three months by means of June, down 3% from the identical interval a 12 months in the past.
  • Order consumption for automobiles in Western Europe rose by 19% within the first half of the 12 months.
  • The corporate mentioned it expects a full-year funding ratio of between 12% to 13% in its automotive division.

The automotive sector is extensively considered acutely susceptible to U.S. tariffs, notably given the excessive globalization of provide chains and the heavy reliance on manufacturing operations throughout North America.

Trump not too long ago threatened to boost duties on EU auto imports to 30% from Aug. 1, ramping up the strain on the 27-nation buying and selling bloc. The European Fee, the EU’s govt arm, has since been contemplating its response.

Volkswagen mentioned it’s assumed that U.S. import tariffs of 27.5% will proceed to use within the second half of the 12 months, noting there’s “excessive uncertainty” with regard to commerce coverage.

Ramping up EV gross sales

Rico Luman, senior sector economist for transport and logistics at Dutch financial institution ING, mentioned it was encouraging to see that Volkswagen had been capable of ramp up its electrical automotive gross sales “fairly considerably,” notably in its dwelling market of Europe.

“Sure, they struggled to maintain up within the export market, however not less than [the] dwelling market is doing nicely in the meanwhile. They’re ramping up EV gross sales. It is now hitting 11% on a world stage of its complete gross sales — and in Europe it’s already far more,” Luman advised CNBC’s “Europe Early Version” on Friday.

“They probably might need benefitted from deteriorated Tesla gross sales however nonetheless it’s doing fairly nicely in the meanwhile in Europe,” he added.

Volkswagen reported first-half car gross sales progress of 19% in South America, 2% in Western Europe and 5% in Central and Jap Europe. The corporate mentioned this greater than made up for the anticipated declines of three% in China and — primarily resulting from tariffs — for a 16% dip in North America.

The corporate mentioned its order consumption for all-electric automobiles within the first half of 2025 rose by 62%.

— CNBC’s Jenni Reid contributed to this report.

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