Core Viewpoint - The article discusses the significant impact of the Trump administration's tariff policies on Volkswagen, emphasizing the urgency for the EU and the US to reach a trade agreement to mitigate these effects [2][4]. Financial Performance - Volkswagen reported a revenue of €158.4 billion (approximately $185.7 billion) for the first half of 2025, remaining stable compared to the previous year, but operating profit fell by one-third to €6.7 billion (about $7.86 billion) [3]. - The decline in operating profit is attributed mainly to increased costs from US import tariffs, amounting to €1.3 billion (approximately $1.52 billion), along with an additional loss of €0.7 billion (around $0.82 billion) from restructuring and other expenses [5]. - The company has adjusted its full-year revenue forecast from a 5% increase to flat growth compared to last year, with an expected operating profit margin of 4% to 5%, down from a previous estimate of 5.5% to 6.5% [5][33]. Market Dynamics - Despite a 1.5% increase in global deliveries in the first half of 2025, Volkswagen's deliveries in the US dropped by nearly 10%, with North America accounting for 18.5% of the group's global sales [6]. - The performance of luxury brands under Volkswagen, such as Porsche and Audi, has been particularly poor, with Porsche's operating profit plummeting over 90% to €154 million and Audi's profit down 64% to €550 million [6][27]. Electric Vehicle Sales - Volkswagen has become the leader in the European electric vehicle market, surpassing Tesla, with a notable increase in sales of electric vehicles in Europe [6][8]. - In Germany, electric vehicle sales reached a record high in the first half of 2025, with a 35% year-on-year increase, totaling 249,100 units, despite a 4.7% decline in overall new car sales [8][9]. Tariff Negotiations - Volkswagen and its competitors are urging European trade negotiators to reach an agreement to lower the 25% US tariffs imposed since April [17]. - There is optimism that an agreement could be reached to impose a 15% tariff on most imported products, which would alleviate some financial pressure on the automotive sector [17][18]. - The company’s CFO indicated that if a deal similar to the US-Japan agreement is reached, profit margins could stabilize within the expected range [18]. Strategic Adjustments - Volkswagen is considering local production of Audi vehicles in the US and increasing exports from its Chattanooga plant to mitigate tariff impacts [31][26]. - The company is also exploring partnerships with Rivian and Xpeng to enhance product competitiveness, although new models from these collaborations are not expected until next year [34].