Volkswagen Lowers Outlook After U.S. Tariffs Hit

Volkswagen reported a 33% decline in operating profit for the first half of 2025, citing a €1.3 billion ($1.5 billion) hit from 25% U.S. auto import tariffs imposed by President Trump. The company lowered its full-year guidance, now projecting an operating profit margin between 4% and 5% and flat sales revenue, compared to previously expected growth. U.S. sales dropped 16% due to the tariffs, but Volkswagen expanded its European electric vehicle market share to 28% and saw a 62% surge in EV order intake. The automaker faces additional pressure from increased competition with Chinese companies, restructuring costs, and higher sales of lower-margin electric models. CEO Oliver Blume stressed the need for intensified cost-cutting and urged European negotiators to secure a trade deal with the U.S. Ongoing EU-U.S. talks may reduce tariffs, offering potential relief to the industry.