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4w ago

Volkswagen's Q1 Profits Plunge 40% Amid U.S. Tariffs and EU Compliance Costs

The automaker's operating profit fell to €2.8 billion, significantly below market expectations, as tariffs and regulatory expenses strained margins despite rising sales revenue.

Cars of the Volkswagen Group intended for export to the United States are seen behind a fence at the seaport of Emden, Germany, April 2, 2025. REUTERS/Wolfgang Rattay/File Photo
A Volkswagen logo is pictured at Volkswagen's headquarters in Wolfsburg, Germany.
Volkswagen has missed market expectations for the first quarter by a long way
Volkswagen says profits have already taken a hit from US tariffs on cars

Overview

  • Volkswagen reported a sharp 40% drop in Q1 2025 operating profit, falling from €4.6 billion to €2.8 billion year-over-year.
  • The decline was driven by U.S. tariffs on auto imports, which heavily impacted vehicles shipped from Mexico and Europe to the U.S. market.
  • One-off costs, including €600 million for EU emissions compliance and €200 million for restructuring its software unit, further weighed on profits.
  • Despite a 3% increase in sales revenue to €78 billion, the results fell significantly short of market expectations of around €4 billion in profit.
  • Volkswagen maintained its 2025 outlook but noted ongoing uncertainties around the full impact of U.S. tariffs and regulatory changes.