Volkswagen flags a tough year ahead as 2025 profit halves on tariffs, China competition

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Germany’s Volkswagen

on Tuesday reported a sharp drop in annual operating profit and flagged another tough year ahead as the auto giant continues to grapple with U.S. tariffs and competition in China.

Europe’s biggest carmaker posted 2025 operating profit of 8.9 billion euros ($10.4 billion), down 53% from the year prior, citing U.S. tariffs, currency effects and a strategic shift at Porsche. Analysts had expected annual operating profit to come in at 9.4 billion euros, according to LSEG consensus data.

Full-year revenue held steady at nearly 322 billion euros, compared to 324.7 billion euros in 2024, and the company’s outlook for sales growth is relatively modest in 2026. Volkswagen said it expects revenue to develop in a range between 0% to 3% this year, falling short of analyst expectations.