Scrap metal on a barge near the Volkswagen AG factory in Wolfsburg, Germany, Tuesday, March 10, 2026.
Bloomberg | Bloomberg | fake images
Germany volkswagen on Tuesday reported a sharp drop in annual operating profit and signaled another tough year ahead as the auto giant continues to grapple with U.S. tariffs and competition in China.
Europe’s largest automaker posted an operating profit of 8.9 billion euros ($10.4 billion) in 2025, down 53% from the previous year, citing U.S. tariffs, currency effects and a strategic shift at Porsche. Analysts expected annual operating profit to reach €9.4 billion, according to LSEG consensus data.
Full-year revenue was flat at almost €322 billion, compared to €324.7 billion in 2024, and the company’s sales growth prospects are relatively modest in 2026. Volkswagen said it expects revenue to develop in a range between 0% and 3% this year, below analyst expectations.
The company also said it anticipates an operating margin of between 4% and 5.5% in 2026, after reaching 2.8% in 2025, up from 5.9% a year earlier.
Arno Antlitz, Volkswagen’s chief operating officer and chief financial officer, described 2025 as a “really challenging” year but said the company remains “well positioned” in Europe.
“We increased our market share slightly despite the increased Chinese competition. In electric vehicles, we even reached a market share of more than 25%, 27%, that is, more than in the combustion engine segment,” Antlitz told CNBC’s Annette Weisbach on Tuesday.
Volkswagen shares rose 4% in early morning trading. The stock is down more than 12% so far this year.
There are no major supply limitations due to the Iran war
The results come as European automakers struggle to confront a host of industry challenges, including strong competition from Chinese auto brands and US President Donald Trump’s import tariffs.
The automotive sector is widely considered to be highly vulnerable to US tariffs, particularly given the high globalization of supply chains and heavy reliance on manufacturing operations across North America.
Asked about the growing Middle East crisis and the potential impact on the company given increased oil price volatility, Volkswagen’s Antlitz said: “This crisis is obviously worrying for all our partners and customers in the region and their families.”
He added: “In terms of effect on our business, so far it is limited. In terms of oil, gas or energy, we have long-term contracts, so we are basically covered on that side and currently we do not see any major restrictions on supply either.”
