German automaker Volkswagen reported an operating profit of 3.5 billion euros ($3.98 billion) for the April to June period, missing LSEG consensus expectations of 4.3 billion euros and falling nearly 10% from the previous year.
Volkswagen Cuts Sales Forecast and 2026 Revenue Expectations
Europe’s biggest carmaker revised its 2026 sales revenue guidance to a range of -3% to 0% compared with the previous year. This marks a downward adjustment from its earlier forecast of 0% to 3% growth. The weaker financial performance stems from negative mix effects and the discontinuation of the company’s top electric vehicle in the United States.
The company confirmed in April that it would end production of the ID.4 electric sports utility vehicle at its Tennessee factory, citing a challenging U.S. market environment for EVs. Shares of Volkswagen dropped nearly 30% year-to-date and fell 3.3% in premarket trading ahead of the open, as reported by CNBC.
Job Cuts and Factory Closure Pressures at German Plants
The profit decline coincides with Volkswagen’s announcement that it is looking to cut up to 100,000 jobs, doubling its previously stated target. CEO Oliver Blume told staff in a memo that the group’s costs are 20% higher than comparable businesses, necessitating deeper expense reductions to counter a profit slump driven by billions of euros in tariff costs and intensifying competition from Chinese car brands.
Blume also stated in the memo that the company has been unable to confirm alternative uses for four German factories previously threatened with closure. These facilities include Volkswagen’s plants in Hanover, Zwickau, Emden, and the group’s Audi facility in Neckarsulm. The automaker previously agreed to a deal with unions in late 2024 to avoid factory closures in Germany and rule out compulsory redundancies until the end of 2030.
Pro Tip: When analyzing automotive sector investments, monitor regional regulatory shifts and inventory adjustments closely, as EV transition costs frequently impact near-term manufacturing margins.
Frequently Asked Questions
What was Volkswagen’s operating profit for the second quarter?
Volkswagen posted an operating profit of 3.5 billion euros ($3.98 billion) for the April to June period, missing LSEG expectations of 4.3 billion euros.
Why did Volkswagen revise its 2026 sales forecast?
The automaker revised its 2026 sales revenue guidance to a range of -3% to 0% due to negative mix effects and the discontinuation of its top electric vehicle in the U.S.
How many jobs is Volkswagen looking to cut?
Volkswagen is looking to cut up to 100,000 jobs, which is twice as many as previously stated.
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