Volkswagen’s latest results didn’t just indicate a bad year. They showed a company stuck in the middle of the auto industry’s biggest transition in a century. The German giant still sells millions of cars and commands iconic brands, but the old formula that made it dominant is under pressure from all directions.
Volkswagen reported an operating profit of 8.9 billion euros (about $10.3 billion) in 2025, down 53% from the previous year and below the 9.4 billion euros that analysts had expected. Revenues remained flat at just under 322 billion euros in 2024 compared to 324.7 billion euros, while operating margins fell from 5.9% to 2.8%.
Management pointed out a number of known problems. US tariffs hurt profits. Currency movements also weigh on results. Competition in China has intensified, and Porsche, one of the group’s most profitable divisions, has undergone a strategic restructuring after demand for electric vehicles proved weaker than expected.
For 2026, Volkswagen expects revenue growth between 0% and 3% and operating margin between 4% and 5.5%. That marks some improvement from 2025’s weak performance but still leaves profits below what investors once expected from Europe’s biggest automaker.
Chief financial officer Arno Entlitz described 2025 as a “really challenging” year but said the group was well positioned in Europe. Volkswagen said it increased its market share slightly despite increasing Chinese competition, claiming a 25% share of the European EV market.
At the same time, the company indicated a deep recovery. CEO Oliver Blume said Volkswagen plans to cut around 50,000 jobs in Germany by 2030 across the wider group, including brands such as Audi and Porsche and software division Caride.
China remains a major pressure point. Volkswagen once dominated the world’s largest auto market but is now losing ground to domestic players like BYD and Geely, which have moved quickly on electric vehicles and pricing.
Volkswagen’s results bring a huge change in the global automotive industry. For decades, German automakers have thrived on a formula built around engineering prestige, global scale, and growing Chinese demand. This combination delivered strong margins and steady growth.
Today, every piece of this formula seems weak.
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China is no longer the smooth profit engine it once was. Domestic brands have become serious competitors, especially in electric vehicles, where they are often cheaper and faster to upgrade. What was Volkswagen’s biggest growth market has become its toughest battleground.
