German carmaker Volkswagen (VW) reported its first quarterly loss in five years on Thursday as it continues to struggle with its subsidiary Porsche and faces a threat from U.S. tariffs.
The loss in the July-to-September period amounted to 1.07 billion euros ($1.24 billion) and was the first suffered by Europe's biggest carmaker since the second quarter of 2020, when it was hit by COVID-19.
The 10-brand manufacturer, whose models range from Skoda to Seat and Audi, warned that U.S. President Donald Trump's tariff blitz was costing it five billion euros on an annual basis.
"The result is much weaker compared to the same period last year," Volkswagen finance boss Arno Antlitz said. "Higher tariffs, adjusting the product strategy at Porsche and write downs to Porsche's value cost 7.5 billion euros."
It is the latest bad news for VW and the wider German auto industry, and reflects broader problems for traditional manufacturers in Europe's struggling top economy.
Beyond tariffs and the slower-than-expected shift to electric cars, fierce competition in the key market, China, has hammered German manufacturers and their suppliers.
Long the jewel in Volkswagen's crown, Porsche in recent years has become a headache for the wider group amid intense pressure from local competitors in China and weak demand for electric sports cars that lack the thrill of noisy petrol engines.
Volkswagen in September warned of a bumper 5.1-billion-euro hit to its core profit for the year after Porsche cut profit targets and said it would carry on selling petrol vehicles for longer than previously planned.
Volkswagen absorbed costs from Porsche's move and also wrote down the value of its shares in the Stuttgart-based sports car maker.
The automotive giant is also dealing with U.S. tariffs on car exports from the European Union, subject to a tariff of 15% under an EU-U.S. deal unveiled late July.
That is down from an earlier level of 27.5% but still far higher than the 2.5% in force before Trump launched his trade war in April.
The carmaker – which has a plant in Tennessee – also has to grapple with U.S. duties on car parts imported from outside North America.
Antlitz said Volkswagen had achieved a "creditable" result, excluding tariff and Porsche-related costs.
"But the burden of tariffs will remain," he said. "It is not really appropriate to exclude it from the calculation."
Despite the net loss, revenues grew by 2.3% to 80.3 billion euros, helped by a slight increase in vehicle sales globally.
Even before Trump unleashed his tariffs, VW was struggling.
The group struck a deal with unions last December to cut 35,000 jobs by 2030, mostly at its namesake brand, as part of wider plans to save 15 billion euros a year.
Group brands Audi and Porsche have also slashed thousands of jobs. Porsche told workers in a July letter that further cost cuts lay ahead, warning that its business model "no longer works in its current form."
The firm in October named ex-McLaren boss Michael Leiters as its new CEO effective Jan. 1, 2026, taking over from Oliver Blume, who also heads up the wider Volkswagen Group.
With both companies in crisis, some unions and investors had criticized Blume's dual role, accusing him of being a "part-time boss."
