• Volkswagen suffers a $1.5 billion loss in the first half of 2025 due to U.S. tariffs.
• The company lowers its profit margin forecast to 4-5%, down from 5.5-6.5%.
• Volkswagen and rivals urge trade negotiators to reduce the 25% tariffs imposed since April.

Volkswagen (VOWG.DE) reported a significant $1.5 billion loss in the first half of 2025 attributed to tariffs imposed by U.S. President Donald Trump. The German auto giant announced a revision of its profit margin forecasts, which now expect a range of 4% to 5%, down from the previous forecast of 5.5% to 6.5%. Additionally, full-year sales are anticipated to remain level with the previous year rather than the previously predicted increase of up to 5%, according to Reuters and Al Jazeera.

The company faced a decline in North American sales, which dropped by 16% due to tariffs, marking a significant impact on its overall performance. Volkswagen joins other major car manufacturers such as GM and Stellantis, who have also reported substantial losses attributed to similar tariff pressures, according to ABC News and Reuters.

CEO Oliver Blume emphasized the need for Volkswagen to accelerate cost-cutting measures, stating, "We need to shift our cost efforts into high gear and accelerate implementation." He warned that the ongoing uncertainty regarding tariff levels adds pressure on financial forecasts, particularly as the company gears up for potential negotiations that might reduce the current punitive tariffs from 25% to 15%, according to Al Jazeera and Reuters.

Volkswagen's operating profit for the second quarter fell by 29% year-on-year to €3.8 billion ($4.46 billion), primarily due to tariffs and restructuring costs, as well as an increase in the sales of lower-margin electric vehicle models. While the company managed a 1.5% increase in global deliveries, U.S. deliveries declined nearly 10%, reflecting broader challenges in the market, as noted by ABC News and Reuters.