WOLFSBURG, Germany — The Volkswagen Group chose to headline its 2025 financial results with a reassuring message about “financial resilience” and a “strong fourth quarter.”
The underlying numbers tell a more complicated story. The German group still sells about 9 million vehicles a year and commands one of the broadest portfolios in the global auto industry. But sustaining profitability while simultaneously funding electrification, software development and a shifting regional strategy is proving more difficult than the optimistic headline might suggest.
Revenue at the German car-making group remained broadly stable last year, but profits collapsed as tariffs, restructuring costs and a strategic rethink within parts of its operations, most notably at Porsche, combined with weakening sales in key global markets.
Group revenue slipped only slightly to 321.9 billion euros from 324.7 billion euros in 2024, while global deliveries were essentially unchanged at 9.0 million vehicles. Operating profit, however, dropped sharply to 8.9 billion euros, down 53% from the year before, leaving Volkswagen with a group operating margin of 2.8%.
Even when restructuring charges and other one-off effects are removed, the picture improves only modestly. Adjusted operating margin reached 4.6%, a figure chief financial officer Arno Antlitz conceded is unlikely to satisfy investors over the longer term.
The reasons are not difficult to identify. Volkswagen points to a combination of U.S. tariffs, currency effects, price pressure and the cost of reshaping Porsche’s product strategy, alongside the continuing expense of electrification and software development.
For a company whose global scale has long been one of its key competitive advantages, regional shifts are becoming increasingly significant. Deliveries in Europe rose 5% and South America grew by 12%. But those gains were offset by declines in North America of 12% and China of 6%.
Demand for electric vehicles is still rising. Volkswagen says orders for battery-powered models in Europe increased roughly 55%, with EVs accounting for around 22% of the group’s order bank in 2025.
But higher electric vehicle volumes have yet to translate into stronger profitability, particularly as the group continues to absorb the cost of developing new software platforms, battery technology and dedicated electric architectures.
That tension is clearly visible across the Volkswagen Group’s extensive brand portfolio. It spans more than a dozen brands ranging from Volkswagen, Audi, Porsche, Škoda, SEAT and Cupra to Bentley, Lamborghini and Ducati, alongside commercial vehicle brands Volkswagen Commercial Vehicles, Scania, MAN and International. There are regional operations, too, including the Jetta brand in China and the Scout brand in the U.S.
The Core brand group, covering Volkswagen passenger cars, Škoda and SEAT/Cupra, generated 145.2 billion euros in revenue, up 3.7%, although operating profit slipped slightly to 6.8 billion euros.
The Progressive group, led by Audi, posted 65.5 billion euros in revenue, up 1.5%, but operating profit fell 13.6% to 3.4 billion euros, reflecting tariff costs and restructuring tied to future technology programs.
The most dramatic shift came within the Sport Luxury division, namely Porsche. Revenue there fell 11.7% to 32.2 billion euros, while operating profit collapsed to just 0.1 billion euros, compared with 5.3 billion euros a year earlier.
The drop reflects weakening demand in China, tariff effects and the cost of realigning Porsche’s product plans at a time when the premium electric vehicle market has cooled.
Not everything in the Volkswagen Group’s 2025 financial results were negative, though.
The core Volkswagen passenger car brand generated 6.4 billion euros in net cash flow, up 24% from 5.2 billion euros in 2024, while net liquidity remained stable at 34.5 billion euros, providing the group with a significant financial buffer as it continues funding the development of new and updated electric models, batteries and software platforms.
