The Volkswagen Group’s operating profit fell by 29% in the first half of 2025 off the back of the impact of tariffs on US imports and the restructuring of its workforce.
US import tariffs cost the VW Group €1.3 billion (£1.13bn) in the second quarter of 2025 alone and CEO Oliver Blume said it “cannot assume the tariff situation is temporary”.
The group’s operating profit figure of €3.83bn for the first half of 2025 resulted in an operating margin of 4.2%. If not for the impact of tariffs and an ongoing project to restructure the business, the margin would have been 5.6%.
In Q2, it was even more stark: a margin of 6.8% declined to 4.7%.
Blume (below) said these latest financial results are also the first to show the impact of its cost-cutting plans. Some 4000 Volkswagen employees have left the business since December and another 20,000 have deals in place to leave.
The goal is to cut costs by €4bn (£3.5bn) per year at VW alone, said Blume, and plans were also locked down to reduce the headcount at Audi by around 7500 people by 2029 and around 3900 at Porsche by the same date.
Margins were also hit at the VW Group by the increased popularity of its electric cars, which have lower profit margins due to their higher costs.
Battery-electric vehicle (BEV) sales were up 47% for the company in Europe year on year and now account for one in five VW Group sales in Europe. Order intake of BEVs grew 62% in this period, showing increased momentum for the group here. Globally, BEVs accounted for 11% of total sales.
Across the VW Group’s ‘Core’ brands – Volkswagen, VW Commercial Vehicles, Skoda, Seat and Cupra – sales rose 1% year on year. Individually, VW sales were flat in the first half of the year at just over 1.5 million units, while Skoda posted a 6% increase, at 582,000 units.
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