Wolfsburg, Germany – Volkswagen Group has revised its financial forecast for 2025, anticipating a challenging year ahead after reporting a substantial 33% decline in its first-half operating profit and a negative cash flow in its core automotive division. The German automaker now expects its 2025 revenue to remain flat, a significant reduction from its earlier projection of up to 5% growth.
For the first six months of the year, Volkswagen’s operating profit plummeted to €6.7 billion, down from €10 billion in the same period last year. This downturn has also led to a revised operating margin forecast, now set between 4% and 5%, a decrease from the previous range of 5.5% to 6.5%.
Several headwinds contributed to the weakened performance. The company incurred €1.3 billion in costs attributed to increased U.S. import tariffs, alongside €0.7 billion in restructuring expenses across its key brands, including Audi, Volkswagen Passenger Cars, and the software unit Cariad. Furthermore, a higher proportion of lower-margin electric vehicles, coupled with adverse price and currency effects, weighed on profitability.
The automotive division’s net cash flow also took a hit, turning negative at €1.4 billion compared to a positive €0.4 billion a year earlier. This decline was primarily driven by restructuring payments, U.S. tariffs, and a €0.9 billion investment in Rivian shares.
Despite these financial challenges, Volkswagen reported a slight increase in vehicle sales, reaching 4.36 million units. Growth in South America, Western Europe, and Central and Eastern Europe helped to offset sales declines in key markets such as China and North America.
Looking ahead, Volkswagen highlighted ongoing risks stemming from political uncertainty, trade restrictions, volatile market conditions, and increasingly stringent emissions regulations, all of which could continue to impact its financial performance.
