A German national flag flies on a barge near the Volkswagen AG plant in Wolfsburg, Germany, on Tuesday, March 10, 2026.
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Volkswagen on Friday reported second-quarter earnings that fell short of analysts’ expectations and abandoned its earlier outlook for sales revenue growth in 2026, as the German automotive giant prepares for a sweeping restructuring of its business.
Europe’s largest carmaker said operating profit for the April-to-June quarter came in at 3.5 billion euros, or $3.98 billion. That marked a drop of nearly 10% from the same period a year earlier and missed the 4.3 billion euros expected by analysts in an LSEG-compiled consensus.
Volkswagen also warned that sales revenue in 2026 could decline by as much as 3% this year, a notable reversal from its previous forecast, which had pointed to revenue growth of up to 3%.
The disappointing results come soon after Volkswagen confirmed it is considering cutting up to 100,000 jobs, double the number previously outlined, as the company tries to offset a sharp profit downturn, billions of euros in tariff-related costs and mounting pressure from Chinese electric vehicle and car brands.
In a memo to employees widely reported earlier this month, CEO Oliver Blume said Volkswagen’s costs were 20% higher than those of comparable companies, meaning the group would have to push ahead with deeper cost reductions.
Blume reportedly said Volkswagen had not been able to identify alternative uses for four German sites that had previously been at risk of closure. Those facilities include Volkswagen’s plants in Hanover, Zwickau and Emden, as well as the group’s Audi site 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.
Shares of Volkswagen slipped 3% on Friday morning. The stock is down nearly 30% year-to-date.
‘We have to do a second step of restructuring’
Volkswagen Chief Financial Officer Arno Antlitz said the auto industry has faced substantial challenges over the past 12 months, citing the heavy burden of tariff costs, the rapid growth of China’s domestic premium car market and the rapidly growing number of car exports from Beijing to Europe.
“This leads to this weight on our margin, a margin of roughly 4% is clearly a wake-up call that we have to do a second step of restructuring,” Antlitz told CNBC’s Annette Weisbach on Friday.
Asked whether the company may look to outsource plant capacity to the defense industry to stave off closures, Antlitz replied: “There are various options. And look, I’m not looking for job cuts per se and I’m not looking for plant closures per se.”
He continued: “We want to reduce our cost structure and we want to increase productivity and increase the capacity utilization of our plants. And if there are better options then we will obviously look into that.”
Antlitz said it is “much better” for the company to find an alternative solution to plant closures.
Shares of Volkswagen year-to-date.
‘An unprecedented risk scenario’
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.
Volkswagen’s 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.
