Volkswagen faced deteriorating financial performance amid US tariffs and weak demand.
Volkswagen Group has revised its financial expectations for the year downward: operating sales profitability is now estimated to be in the range of 4% compared to the previous threshold of at least 5.5%. The main reason was the increase in costs by €1.3 billion in the first half of the year due to US tariffs of 27.5%, as well as expenses on internal transformations and growth in the share of electric vehicle sales with lower margins.
At the same time, the conglomerate forecasts almost zero revenue growth instead of the previously expected 5%, and has also rolled back the free cash flow forecast. The lower boundary of the new range assumes that tariffs remain at the previous level until the end of the year, whereas the optimistic scenario is based on their reduction to 10%.
The automaker is under pressure in three key regions: the US (Audi and Porsche suffer from import tariffs), Europe (restrained demand and high production costs), and China, where VW is losing market share to local brands.
It is separately noted that the Traton truck division has reduced its forecast for adjusted operating profit by 29% in the second quarter due to the same trade barriers, weak growth in Europe, and a decline in orders in Brazil.
Among the positive aspects is the 73% increase in electric car deliveries in Europe in the second quarter, largely thanks to the VW ID.7, Audi Q4 E-tron, and Skoda Elroq models, as well as rebates that diverted some buyers from Tesla.
To strengthen positions in the market, the group relies on a collaboration with Rivian in the US and Xpeng in China; however, the first results of these alliances are expected only next year.