Volkswagen Group reported a sharp 44% drop in net profit for 2025, with after-tax earnings falling to €6.9 billion from €12.4 billion in 2024 — its weakest annual result since the fallout from the 2016 Dieselgate scandal. CFO Arno Antlitz blamed the deterioration on geopolitical tensions, new tariffs and stiffer competition.
Executives said the group will cut around 50,000 jobs across its brands in Germany by 2030 as it contends with weakening demand, faster-moving Chinese rivals and fresh US tariffs — challenges concentrated in its two biggest export markets. Like other German carmakers, VW is also navigating an uncertain transition to electric vehicles amid mixed regional incentives and softer-than-expected consumer uptake.
CEO Oliver Blume stressed some positive signs in a presentation intended to reassure investors, noting VW Group shares have held up relatively better than peers despite the difficult year.
Porsche transition hits profits most
A large share of the group’s profit decline stemmed from its Sport & Luxury segment, in particular Porsche. Porsche’s net profit plunged to €90 million in 2025 from €5.3 billion in 2024. VW attributed the collapse to a changed market environment in China, the impact of US tariffs, slower-than-expected EV adoption and one-off effects tied to the brand’s transition.
Porsche’s works council said extending production runs for combustion-engine models late last year created roughly a €5 billion one-off hit, and that US tariffs cut revenues by about €3 billion. The brand has also been squeezed by rapid improvements from Chinese-made luxury and performance rivals, which have eroded Porsche’s position in its key China market.
Group performance and key figures
Even with Porsche’s setback, other parts of the group were steadier, a factor behind a modest rise in VW shares after the results were released. Key figures included:
– Group deliveries: 8.98 million vehicles, down 0.5% year-on-year
– Total revenue: €322 billion, down about 0.8%
– VW operating profit: €2.61 billion (slightly up from €2.59 billion)
– Audi operating profit: €3.4 billion (down from €3.9 billion)
– Group operating profit margin: 2.8%, down 3.1 percentage points; VW expects a rebound in 2026
– Results improved in the fourth quarter after a €1 billion loss in Q3 2025
Jobs, cost measures and pay effects
Blume confirmed the group will press ahead with the agreed job-reduction plans: roughly 50,000 roles to go in Germany by 2030. About 35,000 of those cuts are at the VW parent company, Audi plans up to 7,500 reductions by 2029, and Porsche has outlined around 3,900 cuts. Management said it aims to meet targets largely through job-sharing, part-time arrangements for older employees and voluntary severance rather than mass redundancies.
Blume’s remuneration fell as performance weakened and after he was replaced as Porsche CEO. The annual report shows he received €7.4 million in 2025 (including pension and performance-related payments), down by about €3 million. Herbert Diess, Blume’s predecessor who retired in October 2025, remained the highest-paid VW executive with €9 million.
Market reaction and outlook
By midday on Tuesday, Porsche shares were up about 2% and VW shares rose just over 2.5%, reflecting that much of the negative news had already been priced in after a difficult 2025. Both companies’ share prices have more than halved over the past five years; each stock was worth roughly €20 more a year earlier. VW expects margins to recover in 2026 as cost measures and the shift to EVs progress, but the near-term picture remains challenged by tariffs and rising competition in key markets.
Edited by: Rob Turner