Volkswagen posts 14% drop in first-quarter profit on tariff pressure, China competition

A Volkswagen logo at the back of an ID.7 electric car at the Volkswagen electric car factory on February 24, 2026 in Emden, Germany. Focke Strangmann | News | German auto giant Volkswagen on Thursday reported weaker-than-expected first-quarter profit, citing higher U.S. tariffs and intensifying competition from Chinese car brands. Europe's biggest carmaker posted operating profit of 2.5 billion euros ($2.92 billion) for the first three months of the year, down 14.3% from a year ago and missing analyst expectations of nearly 4 billion euros, according to an LSEG-compiled consensus. Sales revenue came in at 75.66 billion euros, down 2.5% from the same period in 2025. Analysts had expected this figure to come in at 75.45 billion euros. "Wars, geopolitical tensions, trade barriers, stricter regulations, and intense competition are creating headwinds. In this challenging environment, we have managed to make tangible progress," Volkswagen CEO Oliver Blume said in a statement. The results come as top European original equipment manufacturers (OEMs) navigate several industry challenges, from trade uncertainties and high production costs to electric vehicle adoption constraints and regulatory pressure. The ongoing Middle East crisis is also threatening to hamper demand for luxury cars, with Volkswagen's Blume warning last month that the Iran war could hurt sales of its Porsche and Audi brands. …