Volkswagen lowers guidance as tariffs hit profit in second quarter, ETAuto

Volkswagen on Friday gave its first assessment of how U.S. President Donald Trump’s trade war with Europe is expected to impact its 2025 earnings after tariffs dealt a blow to the German auto giant’s operating profit in the second quarter. Europe’s biggest carmaker now expects an operating return on sales in the range of 4-5 per cent, compared with a previously forecast 5.5-6.5 per cent range, the company said, giving its long awaited assessment of the impact of tariffs on its business.Full-year sales are expected to be level with the previous year, versus a previously forecast rise of up to 5 per cent.

Volkswagen and its peers are pressing European trade negotiators to strike a deal to replace a 25 per cent tariff on their cars in place since April.

Volkswagen reported an operating profit of 3.8 billion euros ($4.46 billion) in the quarter ended June 30, down 29 per cent on the previous year, citing tariffs and restructuring costs, as well as higher sales of lower-margin all-electric models.

Car sales data for June underpinned a broader slowdown in Europe’s struggling auto sector – and showed Volkswagen among the laggards as the company undergoes a major overhaul to cut over 35,000 jobs by the end of the decade.

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