Volkswagen posts 29% drop in second-quarter revenue as tariffs hit laborious

Germany’s Volkswagen on Friday lowered its full-year steering and reported a pointy drop in second-quarter revenue, because the auto big navigates the disruptive influence of U.S. tariffs.

Europe’s greatest carmaker posted working revenue of three.83 billion euros ($4.49 billion) for the three months by means of June, down 29% from 5.4 billion euros a 12 months in the past.

Analysts had anticipated second-quarter revenue to return in at 3.94 billion euros, in keeping with a Factset-compiled consensus.

Volkswagen reported second-quarter gross sales income of 80.8 billion euros, additionally lacking analyst expectations of 82.2 billion euros.

In an extended awaited assessmnet of the influence of U.S. tariffs, Volkswagen stated its 2025 working return on gross sales is now anticipated to vary between 4% to five%, down from a earlier forecast of 5.5% to six.5%.

Full-year gross sales at the moment are additionally anticipated to return consistent with the extent achieved as final 12 months, in comparison with an increase of as much as 5% beforehand.

The outcomes come as Europe’s automakers battle to become familiar with a collection of business challenges, together with strong competitors from Chinese language automotive manufacturers and U.S. President Donald Trump‘s import tariffs of 25%.

“Our half-year figures current a contrasting image: on the one hand, we achieved sturdy product success and made progress in realigning the corporate,” Arno Antlitz, chief monetary officer at Volkswagen, stated in a press release.

“On the opposite, the working end result declined by a 3rd year-on-year – additionally as a result of greater gross sales of lower-margin all-electric fashions. As well as, elevated US import tariffs and restructuring measures had a adverse influence,” he stated.

The automotive sector is extensively considered acutely susceptible to U.S. tariffs, notably given the excessive globalization of provide chains and the heavy reliance on manufacturing operations throughout North America.

Trump lately threatened to lift duties on EU auto imports to 30% from Aug. 1, ramping up the stress on the 27-nation buying and selling bloc. The European Fee, the EU’s govt arm, has since been contemplating its response.

Volkswagen stated it’s assumed that U.S. import tariffs of 27.5% will proceed to use within the second half of the 12 months, noting there may be “excessive uncertainty” with regard to commerce coverage.

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— CNBC’s Jenni Reid contributed to this report.