Low profit margins of EVs compared to combustion siblings leaves the group with a 4% margin
The Volkswagen Group suffered a 40% drop in profits during the start of 2025, which it blamed on the rise of its electric car sales along with the ongoing “global volatile economic situation” Between January and March, after tax earnings for the Group - which is made up of the VW brand, Porsche, Seat, Cupra and more – dropped to €2.
19bn , down 40.6 on Q1 2024. This is despite a 1.4% rise in sales to 2.13 million, which resulted in a sales revenue of €77.6 million . Of those sales, in Europe 20% were EVs , with a 64% increase in sales on the year before. While good for hitting emission targets, “this market success of our electric cars puts pressure on our result,” admitted chief financial officer Arno Antlitz. This left the company with an operating margin of 3.7% which “clearly shows that there is still a considerable amount of work ahead of us,” added Antlitz. But, the German said that this should shift next year with the launch of the ID2, which, he said, “could be the first car that could reach matching parity with an ICE equivalent, such as the T-Cross”. Buoyantly, he added: “We should not give up because the ID 2 family kicks off next year along with more brand new models coming; we will better chemistry and a new battery type. All this is a step forward in costs for the electrical engine.” Other impacts on the Group were the threat of new import tariffs from the US, additional levies on Europe-sold cars made in China – which hit VW by the way of the Cupra Tavescan, and a downturn in sales in China. On tariffs, Antlitz said that it was “too early to make conclusive judgement”, adding: “Given the current volatile global economic situation, it is even more important to focus on the levers within our control. This means complementing our great product range with a competitive cost base – so we can ensure we succeed also in rapidly changing global markets.” Regarding China, where Group sales dropped 6%, he said: “We want to stay relevant in China. We cannot fall below . We want to be ready for 2026 when the new line up comes in.”
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