Volkswagen warns of a €10 billion hit to 2026 earnings

Volkswagen warned on Friday, 18 September 2026, of a 10-billion-euro ($11.4 billion) hit to its annual earnings. Europe's largest carmaker lowered its 2026 profit margin projection to just 1%, down from an earlier forecast between 4% and 5.5%. Volkswagen also narrowed its annual sales outlook to around 315 billion euros, representing a slight fall, compared to previous guidance of flat sales or a drop of up to 3%.

The earnings revision includes a 6-billion-euro writedown on subsidiary Porsche due to lower expectations for its future performance. This marks the second Porsche writedown in a year, following a 5.1-billion-euro hit booked in September 2025. In addition, Volkswagen recorded 2 billion euros in charges tied to writedowns of assets in China, the expansion of early retirement schemes, and the sale of its Osnabrueck plant in northern Germany to Israeli investors and the state of Lower Saxony.

CFO Arno Antlitz stated in an internal interview that global market conditions have continued to deteriorate, particularly in China. He explained that demand for battery-electric vehicles has accelerated amid geopolitical pressures and higher petrol prices, while the company currently earns significantly less on electric cars than on combustion-engine models. The group noted that its Volkswagen and Audi brands are facing intense pressure in the Chinese market.

Volkswagen shares plunged 7.5% following the announcement, while rivals Mercedes-Benz and BMW each fell more than 5%. Earlier in September, Volkswagen agreed with unions to eliminate up to 100,000 jobs by 2030, an increase of 50,000 cuts across the group. Unions have scheduled nationwide protests for Monday outside auto manufacturers and suppliers.