In the second quarter of 2025, Volkswagen Group recorded a profit of €2.3 billion, a 36.3% drop compared to April-June 2024. It has obliged the group to revise its forecasts, and Europe’s number one cr manufacturer now foresees a profit margin between 4 and 5% instead of the 5.5-6.5% margin previewed earlier.

Turnover for 2025 is expected to be the same as in 2024, whereas a 5% increase was previously predicted. Compared to the profit slump, the turnover in Q2 decreased slightly by 3% to €80.81 billion, indicating that sales worldwide performed well (+1.2%).

1.3 billion euros on supplementary taxes

The decrease in our exploitation results can mainly be attributed to the severely augmented import tariffs in the U.S., VW explains, “it has cost us approximately €1.3 billion.” Washington upped the import tariffs in April from 2.5% to 27.5%, a severe blow for German car manufacturers, for whom the U.S. is their third-largest market.

Last year, the VW Group partially offset its losses on the Chinese market, which represented one-third of its worldwide sales, by selling in the U.S. This year, unfortunately, Q2 sales in the U.S. dropped by 16.2%.

The VW Group also feared that the U.S. import tariffs would rise to 30%, but the recent deal between von der Leyen and Trump promises that it will only be 15%. Without doubt, there has been a big sigh of relief in Wolfsburg yesterday evening.

Other worries

The VW Group was also obligated to set aside money for restructuring Audi, Volkswagen, and Cariad, its software company. The CO2 emission objectives and the associated fines also influenced the results. Last but not least, the growth in sales of electric cars (+37.5%) has also impacted profit margins, as EVs are still less profitable than ICE cars.

According to Volkswagen, operational profit would have turned around 5.6% without the Trump tariffs and the restructuring costs. Last Friday, VW Group CEO Oliver Blume suggested that Volkswagen had to make its own deal with the U.S. government, in addition to what was concluded with the EU. He proposes to diminish tariffs by one dollar for every dollar VW invests directly into the U.S.

Investments search

Meanwhile, Volkswagen is reportedly considering a “major capital increase” for its ADMT/Moia unit, which runs the robotaxi program, potentially involving external investors. The carmaker is also looking for partners for other business areas, but not yet for its battery or car divisions.

The considerations extend beyond ADMT and the Moia brand, even though the robotaxi project is seen as the most future-proof venture currently seeking partners. The German Manager Magazin writes literally that Europe’s largest carmaker has “begun the great sell-off”.

VW is also seeking buyers or co-owners for other business units, such as the Porsche subsidiary MHP (an IT consulting company) and the engineering services provider IAV, among others.

The VW management has deliberately excluded two areas from its considerations around capital increases with external investors or strategic partners: the car brands and the Group’s battery business. There have been repeated rumours that VW might bring third parties on board at battery cell subsidiary PowerCo, based in Salzgitter, to share high investment costs.

However, for now at least, that is not the case. VW’s leadership team apparently wants to wait until production runs reliably. At that point, they could prove to potential partners that they have mastered the technology and that PowerCo is an attractive investment, rather than a bet on battery production that fails to deliver, as seen with Northvolt.

The Group leadership intends to use the proceeds from the partial sales now being prepared to cover some of its strategic investments, as billions will be needed to develop autonomous driving, battery technology, and vehicles, both electric and ICE.

While these future investments cannot be postponed, sales and profits from once very profitable brands such as Audi and Porsche, which regularly generated multi-billion-dollar surpluses, are eroding.

Solid-state batteries

At the same time, VW’s battery subsidiary, PowerCo, and U.S. solid-state battery developer QuantumScape are expanding their strategic cooperation and licensing agreement. The partners aim to accelerate the development of the pilot line for the QSE-5 battery, with PowerCo planning to invest up to an additional $ 131 million in the partnership.

Founded in 2010, QuantumScape is recognized as a pioneer in solid-state battery technology. Its lithium-metal solid-state technology promises higher energy density, faster charging times, improved safety, and potential for lower-cost mass production compared to conventional lithium-ion batteries.