Volkswagen trims outlook after profit falls 29% amid tariffs, restructuring costs

Volkswagen AG cut its full-year outlook and reported a 29% decline in second-quarter profit as U.S. tariffs and internal restructuring measures weighed heavily on earnings. The German automaker reported an operating profit of €3.83 billion for Q2, which fell short of analyst expectations and also missed revenue forecasts. U.S. tariffs cost Volkswagen €1.3 billion in the first half of 2025, while restructuring added another €700 million in costs.

Despite challenges, the company reported growing EV momentum in Europe and stable sales in key regions such as South America and Central Europe. Volkswagen now expects a lower 2025 operating return of 4% to 5%, down from its prior forecast of 5.5% to 6.5%.

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Here’s why it matters:

Volkswagen’s results reflect growing pressure from trade policy shifts and cost-heavy EV transitions, both of which affect pricing, supply chains, and product availability for U.S. dealers. The dip in North American sales, driven largely by tariff-related challenges, could lead to tighter inventories and delayed product launches. However, the company’s continued investment in electrification and rising EV order volumes suggest long-term opportunities for dealers aligning with Volkswagen’s evolving strategy.

Key takeaways:

• Q2 operating profit falls 29%
  Volkswagen reported an operating profit of €3.83 billion, down from €5.4 billion a year ago, missing analyst expectations.
• Tariffs and restructuring cost 2 billion euros
  U.S. import tariffs led to 1.3 billion euros in losses, with an additional 700 million euros attributed to restructuring measures.
• Full-year outlook slashed
  VW now forecasts a 2025 operating return on sales between 4% and 5%, significantly lower than its earlier range of 5.5% to 6.5%.
• EV momentum grows
  The global order intake for all-electric vehicles rose 62% in the first half of 2025. In Europe, EVs now represent 11% of Volkswagen’s total sales.
• Regional sales shifts
  North American sales declined 16% amid tariffs, while sales in South America rose 19% and those in Western Europe climbed 2%, highlighting shifting market strengths.