Volkswagen Operating Profit Falls 99% as EV Orders Rise 39%
Volkswagen Group’s operating result fell to €71 million for the first nine months of 2026, down 98.7% from €5.41 billion a year earlier, even as European orders for battery-electric vehicles rose 39%.
The near-erasure of reported operating profit does not mean Volkswagen’s underlying business earned only €71 million. The company recorded €8.7 billion in special items, including €6.4 billion of non-cash impairment charges on Porsche goodwill, roughly €1 billion of impairment adjustments on assets in China and costs connected with the planned sale of Volkswagen Osnabrück.
Before those special items, Volkswagen reported an €8.8 billion operating result and a 3.8% operating return on sales. Management still called that margin too low for the investment the group wants to sustain.
Volkswagen’s nine-month results at a glance
- Sales revenue: €233.4 billion, down 2.2% from €238.7 billion.
- Reported operating result: €71 million, down 98.7%.
- Operating result before special items: €8.8 billion.
- Adjusted operating return on sales: 3.8%.
- Vehicle sales: 5.88 million, down 10.6%.
- Deliveries to customers: 6.01 million, down 9.0%.
- Automotive net cash flow: €4.39 billion, up 144.5%.
These are Volkswagen Group’s reported figures under IFRS, and the adjusted measures are company-defined. The distinction matters because the group’s third quarter alone produced a reported operating loss of €5.86 billion, compared with a €1.30 billion loss in the same quarter of 2025.
EV demand is growing, but margins remain under pressure
Volkswagen said battery-electric order intake in Europe increased 39% during the first nine months. Electric vehicles represented about 40% of its European order bank at the end of September, while the Electric Urban Car Family had accumulated roughly 150,000 orders.
That demand is strategically important, but Volkswagen also said the larger share of lower-margin electric vehicles weighed on earnings. In other words, more EV orders do not automatically translate into higher near-term profit when electric models currently generate less per vehicle than combustion-engine products.
The company’s Core brand group, which includes Volkswagen, Škoda, SEAT/CUPRA and Volkswagen Commercial Vehicles, reported a 4.1% operating margin, down from 4.4%. Volkswagen attributed part of the pressure to the rapid EV ramp-up, weaker contributions from more profitable combustion vehicles and special items including the end of ID.4 production in the United States.
Chiefs Review previously reported that Volkswagen Group deliveries fell while European EV orders rose. The financial release adds the earnings impact and explains why management sees the mix shift as both a sales success and a profitability challenge.
China, tariffs and pricing add pressure
Vehicle sales including Volkswagen’s equity-accounted Chinese joint ventures fell 10.6%. Excluding those ventures, sales were down only 1%, highlighting how much of the volume decline came from China. Volkswagen also cited U.S. tariffs, global pricing pressure and stronger competition in Europe.
The Progressive brand group, led by Audi, posted a 26% decline in operating result to €1.15 billion. Porsche generated €1.49 billion of operating result within the Sport Luxury group, compared with a loss a year earlier that was affected by special items. Chiefs Review’s separate Porsche results report examines that business in more detail.
Automotive net cash flow improved to €4.39 billion from €1.80 billion, driven by lower investment and portfolio measures. That is a stronger cash result, but it does not offset the sharp decline in reported earnings or the pressure on margins.
Volkswagen keeps a narrow 2026 outlook
Volkswagen expects full-year revenue of about €315 billion and an operating return on sales of up to 1%. It forecasts automotive net cash flow between €3 billion and €6 billion and year-end automotive net liquidity of €32 billion to €34 billion.
The outlook assumes the current tariff situation does not change. Volkswagen said it cannot yet reliably measure the potential effect of a further escalation in the Middle East, so that risk is not included.
Management’s response is a cost program of about €31 billion, built around a smaller model range, simpler structures, lower vehicle and overhead costs, more efficient factories and faster technology development. Those are targets rather than completed savings; future results will show how much of the program translates into durable margin improvement.
Featured image: Volkswagen Group CFO and COO Arno Antlitz. Official Volkswagen Group image used with the October 29 results release; credit Volkswagen AG.