Volkswagen’s premium brand Audi lowered its full-year profitability guidance on Friday for the second time this year, as US import tariffs and costs tied to its electric vehicle (EV) shift continue to pressure margins.
The German automaker now expects an operating margin of between 4% and 6%, down from the earlier range of 5% to 7%.
It maintained its revenue forecast for 2025, expecting between €65 billion and €70 billion in sales, and a net cash flow of €2.5 billion to €3.5 billion.
Audi said US tariffs alone had cost the company €850 million ($991 million) in the first nine months of the year, with the full-year total expected to reach €1.3 billion.
Tariffs, restructuring, and EV delays weigh on performance
Audi’s operating margin fell to 3.2% in the first nine months, down from 4.5% a year earlier.
The company cited higher tariffs, restructuring expenses, and compliance costs linked to carbon emissions regulations as key drags.
Chief Financial Officer Juergen Rittersberger said the brand was “addressing the challenging economic situation and intensified competition with consistent cost control,” adding that Audi plans to simplify its product range and reduce complexity.
Like Volkswagen’s Porsche unit, Audi has no manufacturing footprint in the US.
Rittersberger confirmed the company will decide later this year whether to build a plant there—a move that could reduce future tariff exposure.
Audi’s revised outlook also factors in delays to a key EV platform jointly developed with Porsche.
The project, intended to underpin new electric models across Volkswagen’s luxury brands, has been rescheduled after Porsche announced a strategic pivot last month.
The redesign is expected to incur additional costs and production delays.
Semiconductor supply concerns linger
Audi said its revised forecasts assume a stable semiconductor supply, though executives acknowledged risks stemming from an escalating dispute over Dutch chipmaker Nexperia, which could disrupt European auto production.
“We are closely monitoring the situation, but at the moment everything is going according to plan,” Rittersberger said.
The company remains committed to expanding its EV lineup but faces growing headwinds as global demand normalizes and cost pressures mount.
Volkswagen Group hit by rare quarterly loss
Volkswagen AG, Audi’s parent company, reported a net loss of €1.07 billion ($1.24 billion) for the third quarter—its first quarterly loss in five years.
The result, the company said, reflected the financial burden of US tariffs and strategic adjustments at Porsche.
Finance chief Arno Antlitz described the performance as “much weaker” than last year’s, citing write-downs related to Porsche’s delayed EV rollout and higher-than-expected trade costs.
“Without these negative effects, our operating margin would have been 5.4%,” Antlitz said.
“That’s actually a respectable figure in the current economic environment.”
Despite the setback, Volkswagen maintained that its long-term EV transition plans remain on track, though profitability will remain under pressure through 2026 as it overhauls production and invests in next-generation vehicle technology.
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