Volkswagen Reports $1.5 Billion First-Half Loss from US Tariffs

Volkswagen has suffered a significant financial impact from U.S. tariffs imposed under President Donald Trump's administration, with the company reporting a €1.3 billion ($1.5 billion) hit in the first half of 2025. This tariff burden, combined with rising sales of lower-margin electric vehicles and restructuring costs, led to a 38.5% year-over-year decline in net profit to €4.48 billion. Volkswagen's second-quarter operating profit also dropped 29% to €3.83 billion, prompting the automaker to lower its full-year operating margin forecast to between 4% and 5%, down from 5.5% to 6.5%. The tariffs, which include a 27.5% tax on European car imports to the U.S., have notably hurt Volkswagen's luxury brands such as Porsche, Bentley, Audi, and Lamborghini, with some profits halving or falling by two-thirds. Sales in North America declined 16%, directly attributed to tariffs, while global sales saw a slight increase. Volkswagen warns that tariffs may remain a permanent challenge, leading to intensified cost-cutting efforts as talks between the U.S. and EU continue with a looming threat of higher tariffs if no deal is reached.