VW Lowers 2025 Outlook After US$1.5 Billion Loss from Tariffs

Volkswagen revised its full-year 2025 forecast after reporting a €$1.3 billion (US$1.5 billion) loss in the first half of the year, attributed to US-imposed tariffs, according to a company statement.

The automaker lowered its operating margin forecast to between 4% and 5%, down from the previously expected 5.5% to 6.5%. Sales growth projections were also revised downward, now expected to remain flat compared to 2024 levels.

“This is the first public accounting of the impact of US tariff policy,” the company said in its report, signaling a shift in guidance amid ongoing trade tensions.

Volkswagen CEO Oliver Blume called for immediate internal cost-cutting measures in response to the new market conditions.

“We need to intensify our cost-reduction efforts and accelerate implementation,” Blume said. “We cannot assume the tariff situation is temporary.”

Volkswagen shares dropped as much as 4.6% during early trading on July 25. The stock later recovered slightly, rising 1% by 13:05 GMT, as investors responded to the revised forecast. Market sentiment was also influenced by projected recovery in the group’s premium brands, Audi and Porsche, in 2026, despite a weak Q2 performance.

Tariff pressure has prompted Volkswagen and other European automakers to urge EU trade negotiators to reach an agreement with the United States to lower import duties. Meanwhile, the company continues to face broader challenges, including increased competition from Chinese automakers and stricter European regulations aimed at accelerating the transition to electric vehicles.