Volkswagen incurred €5 billion in losses due to US tariffs and Porsche's problems
Kyiv • UNN
Volkswagen reported an operating loss of 1.3 billion euros in the third quarter due to a change in Porsche's electric vehicle strategy. The company also faces additional costs due to US tariffs, which could reach 5 billion euros this year.
A costly course correction by Porsche's subsidiary dealt a severe blow to Volkswagen in the third quarter, resulting in an operating loss of 1.3 billion euros ($1.52 billion) and billions of dollars in increased costs, in addition to pressure from US tariffs, Reuters reports, writes UNN.
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Volkswagen incurred losses of 4.7 billion euros due to Porsche's change in electric vehicle strategy in the first nine months, while US import duties are expected to cost Europe's largest automaker up to 5 billion euros this year, the company said on Thursday.
"These consequences will persist, and that is why we must consistently implement existing performance improvement programs, promote efficiency measures and develop new approaches," said the company's CFO Arno Antlitz.
He pointed to a "mixed picture" for the current year, citing high demand for Volkswagen electric vehicles in Europe and progress in restructuring, but also pressure on profitability due to the transition to electric vehicles.
Volkswagen reported an operating loss in the third quarter, compared to an operating profit of 2.8 billion euros for the group a year earlier, but it was smaller than the 1.7 billion euro loss forecast by analysts surveyed by Visible Alpha.
Volkswagen shares rose 1.2% in early trading in Frankfurt after the quarterly earnings release.
Porsche, 75.4% owned by Volkswagen, also went deep into the red in the third quarter, delaying the launch of electric vehicles in an attempt to win back consumers with hybrid and internal combustion engine cars.
Volkswagen CEO Oliver Blume is also the CEO of Porsche, but will hand over the reins at the end of the year, retaining his position as head of the parent company.
Investors have increasingly questioned his ability to manage two companies simultaneously during a period of significant challenges for both.
Volkswagen on Thursday maintained its annual forecast, but said it was based on the assumption of sufficient chip supply, hinting at the automaker's next front in the battle, as a trade standoff over Dutch chipmaker Nexperia threatens production stoppages in the automotive industry, the publication writes.
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