Volkswagen Faces Challenges with Profit Margins, Trade Tensions, and EV Competition

Europe’s largest automaker projects flat profit growth for 2025 as it contends with high costs, Chinese competition, and potential U.S. tariffs.

Volkswagen forecasts a 2025 operating profit margin of 5.5% to 6.5%, slightly up from 5.9% in 2024, with sales expected to grow by up to 5%.
The company’s 2024 net profit fell 30.6% to €12.4 billion, attributed to high production costs, restructuring expenses, and declining sales in China.
Volkswagen is grappling with fierce competition from Chinese electric vehicle manufacturers and higher costs in its transition to electric mobility.
Potential U.S. tariffs proposed by President Donald Trump, targeting European auto imports, could significantly impact Volkswagen's operations, particularly for its Audi and Porsche brands.
The automaker continues cost-cutting efforts, including job reductions and efficiency measures, while facing criticism for its high labor costs and complex operations in Germany.