German automaker Volkswagen AG reported first quarter earnings on Wednesday, with its operating profit plummeting around 37% year-on-year to €2.9 billion, as the company continues to deal with the impact of US tariffs.
Sales revenue edged up 3% to €78bn in the first quarter of this year, compared to the same period in 2024.
Around 2.1 million vehicles were sold in the first three months of 2025, an increase of 1% from the first quarter of 2024.
The global share of battery electric vehicle (BEV) deliveries rose from 6% to 10% year-on-year.
In Western Europe, Volkswagen’s share of BEV deliveries jumped from 9% to 19%, with every fourth BEV registered in the first quarter coming from Volkswagen Group.
The worldwide car sector is significantly vulnerable to the current US tariffs on car imports, especially because of how globalised auto supply chains are. This means that several car manufacturers depend considerably on production facilities outside of the US.
Although Trump altered the current 25% auto tariffs this week to make it simpler for manufacturers to avoid high duties, firms have already been impacted. It may also take more time for the full extent of this tariff reduction to filter through the sector.
Arno Antlitz, the CFO and COO of Volkswagen AG, said in the first-quarter earnings release on the company’s website: “As expected, the Volkswagen Group experienced a mixed start to the fiscal year. Our cars are very well received. Order intake in Western Europe increased significantly and our order books are filling up fast.”
Antlitz pointed out that every fifth car sold in Western Europe is now fully electric.
He added: “At the same time, this market success of our electric cars puts pressure on our result. An operating margin of around four percent clearly shows that there is still a considerable amount of work ahead of us.”
He also highlighted the importance of focusing on the levers within the company’s control, against a backdrop of volatile global economic conditions. The firm must complement its wide product range with a competitive cost base, in order to boost chances of success in rapidly changing market situations, he said.
Coming to the outlook for the year ahead, Volkswagen Group expects sales to exceed the previous year’s figure by up to 5%.
The operating return on sales is likely to be between 5.5% and 6.5%, said the firm, but this guidance does not include any impact from the current tariffs.
The automotive net cash flow for the year is estimated to be anywhere between €2bn and €5bn, whereas net liquidity in the automotive division is likely to be somewhere between €34bn and €37bn.
The company said in the earnings press release: “Based on the developments in the period up to April 28, 2025, the Volkswagen Group expects the operating return on sales, automotive net cash flow and net liquidity to trend towards the lower end of the respective ranges. It remains the group’s goal to continue its robust financing and liquidity policy.”
