Volkswagen Group’s Profits Tumble As Tariffs Hit Hard

VW has been forced to adjust its sales revenue expectations for 2025

The Volkswagen Group has just reported its business results for the second quarter and first half of 2025, and as expected, things aren’t looking good. The company’s profits were already down in the first quarter, and with Porsche going through its own troubles, we suspected the second quarter wasn’t going to be much better. 

In Q2 of 2025, the VW Group’s profits were down by a third compared to the same quarter last year, and the decline for the first half of the year as a whole is even worse. These declines came even as the company managed to increase sales in the first six months of 2025.

Higher EV Sales And U.S. Tariffs To Blame For Lower Profits

In Q2, VW’s earnings after tax were €2.29 million (around $2.69 million), a drop of 36.3% year-on-year. When taking into account the first quarter, too, the company’s earnings after tax dropped by 38.5%.

Its operating result for Q2 came in at €3.8 million (approximately $4.4 million), down by 29.4%. For the first six months, the operating result declined by 32.8%. Sales revenue dropped by 3% for Q2 and only 0.3% for the first half of 2025.

It’s not a matter of VW selling fewer cars, as deliveries for Q2 and the first half were up by 1.2% and 1.3%, respectively; the brand delivered 2.27 million cars in Q2 and 4.4 million cars for the first half.

“Our half-year figures present a contrasting picture: on the one hand, we achieved strong product success and made progress in realigning the company,” said Arno Antlitz, CFO and COO, VW Group. “On the other, the operating result declined by a third year-on-year – also due to higher sales of lower-margin all-electric models. In addition, increased US import tariffs and restructuring measures had a negative impact.”

Porsche And Audi’s Struggles Exacerbate Tough Year

Year-on-year, Audi sales declined by 12% in the United States. In its report, the company mentioned “provisions for restructuring at Audi” as one of the areas affecting costs, along with the high tariffs. We only just reported on Porsche’s plan to cut costs as sales decline in major markets. 

“Our business model, which has served us well for many decades, no longer works in its current form,” said Porsche CEO Oliver Blume this week.

Even though individual models like the Audi Q6 e-tron have seen sales growth, the lower profit margins on EVs ultimately drags down the company’s overall earnings. Due to its performance in Q2, the VW Group now anticipates its sales revenue for 2025 to match last year’s performance. Previously, the company expected an increase of 5%.

VW isn’t the only manufacturer grappling with lower profits this year. Tesla’s profits were down 16% in Q2, although the EV giant’s challenges are more to do with political controversies surrounding Elon Musk than tariffs.