Posted on 29 Jul 2025
German carmaker Volkswagen has seen a €1.3 billion ($1.5 billion) hit in the first half of 2025 due to tariffs imposed by US President Donald Trump.
Its total net profit in H1 fell by 38.5% year-on-year to €7.28 billion, Kallanish notes.
According to the company, its financial results were also impacted by decreased sales of electric vehicles at lower profit, as well as restructuring costs.
“However, the company was still on the right track’s and that results were at the upper end of expectations if customs duties and restructuring costs are excluded,” said Arnaud Antlitz, VW chief financial officer.
In December 2024, VW reached an unprecedented agreement with unions to cut 35,000 jobs in Germany by 2030 as part of plans to save €15 billion a year. The group also cut its revenue and profit forecasts, warning of “political uncertainty and increased trade barriers” for the rest of the year.
It now forecasts a 2025 profit of 4-5%, down from the previous 5.5-6.5%. The forecast assumes that in the best-case scenario the US will continue to impose a 10% tariff on car imports, and in the worst-case scenario it will stick with the current rate of 27.5%.
The company's car sales in North America fell by 16% in the first six months, mainly due to tariffs, although globally they recorded a slight increase, the enterprise claims.
In April, Trump imposed an additional 25% tax on car imports as part of a new trade policy that he said would help boost US manufacturing. This has hit European automakers hard. In recent days, French group Stellantis announced losses of €2.3 billion for H1.
The EU and US reached a trade deal on Sunday 27 August - ahead of the 1 August deadline for a planned 30% tariff hike - to impose 15% tariffs on most European goods. Under the terms of the deal, the US will levy a 15% baseline tariff on most EU imports, including cars, semiconductors, and pharmaceuticals.
Earlier, German defence manufacturer Rheinmetall said it is considering taking over one of Volkswagen's soon-to-be-unused plants, as the arms maker seeks additional production capacity in Germany while domestic carmakers struggle (see Kallanish passim).
VW's Osnabrück plant is one of three that will remain unused for the next two years after the automaker decided last December to halve its production capacity in the country due to slowing car sales in Europe.
Source:Kallanish
