Measures under evaluation were deemed unnecessary by the Commission.
Volkswagen Group is in talks with the U.S. government to potentially waive tariffs on imported vehicles in exchange for significant investments in the American market. CEO Oliver Blume has proposed a $10 billion investment, with the agreement to offset these investments dollar-for-dollar against the tariffs paid by the company.
The negotiations come as the automaker has been impacted by U.S. tariffs, which have caused a $1.4 billion hit to the company's costs in the first half of 2025 alone. Volkswagen currently operates an assembly plant in Chattanooga, Tennessee, and is investing an additional $2 billion in a new plant in Blythewood, South Carolina, for producing electrified vehicles under the Scout brand.
Financially, the tariffs have forced Volkswagen to cut its 2025 financial guidance for revenue and operating margin. The company now expects sales revenue to remain flat compared to the previous year instead of growing 5%, and operating return on sales to fall to between 4% and 5%, down from 5.5–6.5%.
Meanwhile, Volkswagen has announced a major savings program that will result in the loss of around 35,000 jobs by 2030. Around 20,000 employees have agreed to job cuts, mostly in the form of early retirement. The company's core brand generated more operating profit than the two premium sister brands combined in the second quarter, earning 991 million euros.
However, the long-struggling Audi brand has announced plans to cut 7,500 jobs, and its operating profit fell by two-thirds to 550 million euros in the second quarter. Porsche also reported a significant drop in profits, with earnings in the car business falling from 1.7 billion euros a year ago to just 154 million euros.
Despite slightly increased deliveries, revenue fell by three percent to 80.6 billion euros. The tariffs in the USA cost the group 1.2 billion euros and led to a 16% drop in sales. CEO Oliver Blume expects lower revenue for Volkswagen, targeting revenue at the previous year's level.
In conclusion, Volkswagen is seeking a company-level deal with the U.S. government to offset the cost impact of ongoing trade tensions while expanding their electric vehicle footprint in the American market. The outcome depends on both this deal and broader EU-U.S. trade negotiations. The company is also implementing a major cost-cutting program to address profit declines caused by tariffs and the weakness of its premium brands.
[1] Reuters [2] Bloomberg [3] Autocar [4] Car and Driver
- The proposed investment by Volkswagen Group in the American market, projected to be $10 billion, is a significant move in the finance sector, aimed at reducing tariffs on imported vehicles in the industry, thereby boosting their business operations.
- With U.S. tariffs causing a $1.4 billion hit to Volkswagen's costs, the company has been forced to cut its 2025 financial guidance for revenue and operating margin, signifying a challenging period in their business and industry.
