Volkswagen Tariffs Hit Profits, Audi Plans US
Key Takeaways
- Volkswagen absorbed a $1.5 billion tariff hit in H1 2025, slashing its annual profit forecast .
- North American deliveries plunged 16%, while EV sales surged 62% globally .
- CEO Oliver Blume demands accelerated cost cuts, declaring tariffs “not temporary” .
- Audi may debut U.S. production as a shield against future trade wars .
The Assembly Line Blues
Workers in Dresden wipe down ID.3 electric cars under sterile lights. The machines hum. The numbers spit out poison. Volkswagen’s Q2 profit dropped 29%, 3.83 billion euros instead of the expected 3.94 billion. Sales revenue missed by 1.4 billion euros. Tariffs carved out 1.3 billion euros from January to June. Restructuring costs bled another 700 million. The factory floor keeps moving. The accountants vomit in silence .
Guidance Guillotine
Friday morning. Shareholders clutch coffee. Volkswagen drops the axe: 2025 operating margin forecast cut to 4%-5% from 5.5%-6.5%. Sales growth? Gone. Now they’ll scrape level with 2024. Analysts expected blood. They got a hemorrhage. CFO Arno Antlitz calls it a “mixed picture.” Twenty-five percent market share in Europe. EV orders up 62%. But the export market chokes. The stock dips 4.6% at opening. Then it claws back. Hope is a feral cat .
Trump’s Tariff Hammer
Twenty-five percent tariffs on EU autos since April. Thirty percent threatened by August 1. Volkswagen’s North American deliveries crumbled 16% in H1. The region delivers 18.5% of global revenue. Blume barks: “We cannot assume this is temporary.” Antlitz whispers: A Japan-style 15% tariff deal could save their margins. No deal by July’s end? “We tend to the lower end” .
Volkswagen Regional Sales Impact (H1 2025)
Porsche and Audi: The Walking Wounded
Porsche’s operating profit: 154 million euros in Q2. Down 90%. Audi: 550 million. Down 64%. No U.S. factories. Just pure, tariff-slammed exports. Blume promises “positive momentum from 2026.” Investors check their watches. The clock ticks toward August 1. The luxury brands bleed out in slow motion .
The American Gambit
A boardroom in Wolfsburg. Maps spread. “Build Audis in America.” For the first time. Ever. The $1.5 billion tariff wound demands surgery. Shift production. Dodge the bullet. The White House gets the offer. No details yet. Just survival instincts kicking in. .
EV Double-Edged Sword
Eleven percent of Volkswagen’s global sales are EVs now. Europe? Higher. They outsell Tesla there. But margins stink. Antlitz admits: EV profits trail gas burners. The ID.3 rolls off lines in Dresden. The company loses money on each one. Progress smells like burnt cash .
Restructuring the Corpse
Thirty-five thousand jobs to cut by 2030. Blume screams “accelerate cost efforts.” The unions stir. The press release murmurs about “investment ratios” and “efficiency programs.” Workers hear axes sharpening. The numbers demand sacrifice .
The Calendar Trap
July 25. Eleven days until Trump’s deadline. EU diplomats scramble for a 15% tariff deal. Volkswagen’s guidance dangles on a thread. “High uncertainty” they call it. Antlitz: “The longer we go into H2, the lower we go.” The stock market shrugs. Shares rise 3.9%. Humans gamble. Machines don’t.
FAQs
Why target Audi for U.S. production?
No U.S. factory footprint makes Audi hyper-exposed to tariffs. Porsche suffers the same wound .
How much worse are EV margins?
Volkswagen won’t say. But CFO Antlitz calls them “lower than ICE vehicles” , even with 62% order growth .
Could Porsche follow Audi to America?
Not mentioned. But 90% profit drops have a way of changing minds.
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