Volkswagen’s Q1 2025 earnings missed expectations, with operating profit plummeting 37% from the previous year, despite a 2.8% bump in revenue to €77.6 billion. The German automaker sold 2.1 million vehicles globally, a 0.9% increase from the same period last year, driven by a 29% surge in Western European orders.
The company’s financial performance was hampered by rising costs and extraordinary factors that dragged down profits. Arno Antlitz, Volkswagen’s Chief Financial and Operating Officer, said the company needs to “focus on cost control and maintaining product advantages” to stay afloat in a volatile global economy.
Trade Policy Uncertainty
Volkswagen’s results come amid growing uncertainty surrounding US trade policies. Although President Donald Trump recently relaxed some tariffs on the automotive industry, a 25% import tax on foreign vehicles and additional tariffs on spare parts remain in place, effective May 3.
The tariffs are likely to hurt Volkswagen’s business, as well as the global automotive industry. The company’s revenue growth is expected to be modest, excluding China, but the outlook for the full year is uncertain.
Some key stats from Volkswagen’s Q1 2025 earnings report:
- Revenue: €77.6 billion, up 2.8% year-over-year
- Operating profit: €2.9 billion, down 37% year-over-year
- Global vehicle sales: 2.1 million, up 0.9% year-over-year
The company may revise its full-year guidance downward, citing the challenging market conditions. Volkswagen’s struggles reflect the broader challenges facing the automotive industry, including rising costs, regulatory pressures, and shifting consumer demand.
Source: CNBC