Strategic readjustment at Porsche, as well as dwindling sales in both main export markets, the US and China took a big bite out of VW's 2025 profits — which almost halved.Volkswagen's top executives on Tuesday said the vast automotive empire suffered a 44% reduction in net profits in 2025, with gains after tax dropping to €6.9 billion (roughly $8 billion) from 12.4 billion in 2024.

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That's the company's worst annual overall performance since 2016, at the height of the financial fallout from the so-called "Dieselgate" scandal.

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"2025 was punctuated by geopolitical tensions, tariffs and highly intense competition," Chief Financial Officer Arno Antlitz said in the company press release.

The VW Group is planning 50,000 job cuts across its various brands by 2030. It is struggling with falling demand and rapidly improving homemade competition in China, as well as new tariffs in the US, by far its two biggest export markets.

Like the rest of the German car industry, the VW Group is also struggling with managing and judging the pace of the shift towards electric motoring. Targets and incentives often vascillate and vary by region and public demand remains lower than many politicians and industry leaders had hoped.

Nevertheless, VW CEO Oliver Blume tried to emphasize the positives, for instance pointing to comparatively strong recent performance of VW Group shares when compared to the industry as a whole in his presentation aimed in no small part at shareholders.

Porsche's electric slowdown takes big bite out of profits

A vast chunk of this dip was attributable to VW's performance brand and longest-standing partner Porsche, with the Stuttgart-based company's net profits all but wiped out. The company logged a net profit of just €90 million, compared to €5.3 billion in 2024.

"The reasons for the reduction are a fundamentally changed market environment in China, the US tariffs, the slower rise of electromobility and the one-off and special effects that are connected with it," VW wrote in the "Sport Luxury" segment of its annual report that pertains to Porsche's performance.

The works council said that Porsche's decision late last year to extend its production running times for combustion engine models accounted for a one-off financial hit in the region of €5 billion. It also said that US tariffs led to lost revenues in the region of €3 billion.

Once a major cash cow for the VW Group, Porsche has struggled in particular with the rapid advent of higher quality Chinese-made luxury and performance cars emerging as a serious rival to its top end sales in China faster than most in the industry anticipated.

What did the company's other core figures look like?

As Porsche's balance sheet to a huge hit, other parts of the company performed better than some of 2025's doom-laden headlines seemed to suggest, perhaps helping to explain why VW share prices jumped on Tuesday morning amid the nominally bad news.

Some of the key figures across the group's main marques follow here:

The Group as a whole delivered 8.98 million vehicles across all brands, a dip of just 0.5% from 2024

Total revenue was €322 billion, down roughly 0.8%

VW operating profit rose marginally, from €2.59 billion to €2.61 billion

Audi's operating profit dipped to €3.4 billion from €3.9 billion

The Group's operating profit margin dipped 3.1 percentage points to just 2.8%; VW predicts a sharp rebound again in 2026

Performance rebounded in the last quarter, following a €1 billion loss in the third quarter of 2025

Job cuts and cost cutting planned, bosses' pay packets also impacted

CEO Blume confirmed in his letter to shareholders that the company was sticking to its job cut plans hammered out with trade unions in recent months.

"In total, around 50,000 jobs are due to be cut by 2030 across the Volkswagen Group in Germany," he wrote.

A large chunk of these, roughly 35,000, will be cut at the parent company VW. Audi also plans to shed up to 7,500 jobs by 2029, while Porsche had announced plans to cut around 3,900 jobs. But the companies are aiming to achieve these plans primarily via job-sharing or part-time deals for older workers and voluntary severances, not redundancies.

CEO Blume also faced reduced rewards in 2025 as performance dipped and as he was replaced as the CEO of Porsche, from which he had graduated to head the VW Group as a whole. The company's annual report showed Blume was paid a total of €7.4 million, including his pension package and various performance-related payments, in 2025, a dip of around €3 million.

Blume's predecessor Herbert Diess was again the top-paid VW manager, earning a total of €9 million. Diess was replaced by Blume in 2022 but remained on the payroll and only went into retirement in October 2025.

As of midday on Tuesday, Porsche's shares were up around 2% and VW's shares had risen by just over 2.5%. But the losses had already been priced in by the market during a torrid 2025. A Porsche share was worth around €20 more this time last year, and the same can be said for VW's stock. Longer term, both companies' share prices have more than halved in the past five years.

Edited by: Rob Turner

(The above story first appeared on LatestLY on Mar 10, 2026 06:00 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).