Volkswagen has posted its first quarterly loss in five years, amounting to €1.07 billion ($1.24 billion), as the German automotive giant grapples with US tariffs and mounting challenges at its luxury subsidiary Porsche.
The loss, recorded between July and September 2025, marks Volkswagen’s first since the second quarter of 2020, when the company was hit hard by the COVID-19 pandemic.
The group—which oversees 10 brands, including Audi, Skoda, and Seat—warned that the tariff measures introduced by US President Donald Trump are costing the company an estimated €5 billion annually.
“The result is much weaker compared to the same period last year,” said Arno Antlitz, Volkswagen’s Chief Financial Officer.
“Higher tariffs, Porsche’s revised product strategy, and asset write-downs cost us about €7.5 billion overall.”
The company’s financial woes reflect a broader downturn in the German auto industry, which continues to struggle with slowing economic growth, global competition, and the rocky transition to electric mobility.
Porsche Troubles
Once considered the crown jewel of the Volkswagen Group, Porsche has become a growing concern amid declining demand for electric sports cars and increasing competition in China.
In September, Volkswagen warned of a €5.1 billion reduction in annual profit after Porsche slashed its earnings forecast and announced plans to continue selling petrol-powered cars longer than expected. The move forced Volkswagen to absorb additional costs and reduce the book value of its Porsche stake.
Tariffs and Trade Tensions
Volkswagen is also contending with US import tariffs of 15 per cent on cars shipped from the European Union, down from a previous 27.5 per cent but still much higher than the 2.5 per cent rate in place before Trump’s 2024 trade war escalation.
The automaker, which operates a plant in Tennessee, is also affected by tariffs on imported car parts. Antlitz said the company is exploring price adjustments and may build an Audi factory in the US to offset the impact.
“Localising parts in the US is exactly what we’re evaluating,” he said. “We’ll decide on the new Audi plant before year’s end.”
Despite the setback, Volkswagen’s revenues rose 2.3% to €80.3 billion, buoyed by modest growth in global vehicle sales.
Chip Supply Concerns
Beyond tariffs and weak demand, Volkswagen faces renewed supply chain issues following Dutch authorities’ takeover of Nexperia, a Chinese-owned chipmaker. Beijing’s subsequent export ban on Nexperia chips has disrupted supply to European car manufacturers.
According to the European Automobile Manufacturers’ Association (ACEA), chip inventories are “rapidly dwindling.”
Volkswagen warned that production halts are possible if shortages persist.
“We’re safe until the end of next week,” Antlitz admitted. “Right now, we’re managing production on a day-to-day, week-to-week basis.”
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