A German national flag on a barge near the Volkswagen AG factory in Wolfsburg, Germany, on Tuesday, March 10, 2026.
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Volkswagen reported weaker-than-expected second-quarter profits on Friday and scrapped hope for sales revenue growth in 2026, as the German auto giant lays the groundwork for a radical overhaul of the business.
Europe’s biggest carmaker posted an operating profit of 3.5 billion euros ($3.98 billion) for the April to June period, down nearly 10% from a year ago and missing expectations of 4.3 billion euros, according to an LSEG-compiled consensus.
The company also flagged it expects sales revenue in 2026 to see a decline of up to 3% this year, versus a previous forecast of sales revenue growth of up to 3%.
The results come shortly after the company confirmed it is looking to cut up to 100,000 jobs, twice as many as previously stated, as it seeks to counter a profit slump amid billions of euros in tariff costs and intensifying competition from Chinese car brands.
In a widely reported memo to staff earlier this month, CEO Oliver Blume said that the group’s costs were 20% higher than comparable businesses and the company would therefore need to reduce costs even further.
Volkswagen’s CEO reportedly said the company had been unable to confirm alternative uses for four German factories previously threatened with closure. These refer to Volkswagen’s plants in Hanover, Zwickau, Emden, and the group’s Audi facility in Neckarsulm.
The automaker had agreed a deal with unions in late 2024 to avoid factory closures in Germany and rule out compulsory redundancies until the end of 2030.
‘An unprecedented risk scenario’
Blume said Friday that the company had managed to offset “continued unavoidable headwinds” in the double-digit billions.
“At the same time, the environment for the automotive industry remains extremely challenging: geopolitical crises, trade conflicts, high regulatory requirements, volatile markets and intensified competition,” Blume said in a statement.
“In an unprecedented risk scenario, Volkswagen Group enters the next phase of its transformation – from a position of strength and with a clear understanding of the opportunities ahead,” he added.
Shares of Volkswagen year-to-date.
Volkswagen said in April that it would end production of the ID.4 electric sports utility vehicle out of its Tennessee plant amid a challenging U.S. environment for EVs.
Shares of Volkswagen are down nearly 30% year-to-date. Volkswagen was down 3.3% in premarket trading ahead of the open.
