Volkswagen Group CEO Oliver Blume said that US tariffs have already cost it several billion euros, with luxury Porsche brand also affected.
Volkswagen Group’s CEO has warned that US tariffs have already cost the company several billion euros this year. Speaking at a car show in Munich, Oliver Blume confirmed that trade sanctions have added a significant amount to the company’s balance sheet costs this year.
Blume said tariffs of 27.5% on European cars remain a heavy burden and have severely affected its yearly earnings. The Volkswagen Group, which also controls the Porsche and Audi car brands, is still waiting on President Donald Trump’s pledge to cut duties to 15%.
The German manufacturer revealed losses of €600 million for Audi and €600 million for Porsche during the first half of 2025. Both are facing increased costs with neither manufacturer currently having production facilities based in the US.
Blume described Porsche’s challenges as severe, with the brand caught between tariffs in the US and weak sales in China. He said Porsche was in a “sandwich position more than any other carmaker” within the current environment.
Company bosses are in advanced discussions with Washington officials about major investments that could advance its American presence. A final decision regarding the construction of a local US-based Audi plant is expected by the end of the year.
Volkswagen seek clarity on trade tariffs
Senior executives at Volkswagen have engaged in “very positive” discussions with the US government about possible tax breaks. If successful, these could support planned investments and help the company offset ongoing restrictions and tariff costs.
The Volkswagen boss argued that the current trade arrangement between Brussels and Washington was unfair. European car imports face heavy duties while US industrial goods enter Europe tariff-free.
He emphasised the need for clarity on tariffs in order for the firm properly to finalise its localisation strategy. He confirmed that decisions on supply chains, workforce, and investment must be made within a matter of weeks.
“We don’t appreciate the asymmetric deal between US and EU, because it’s distorting the competition in Europe,” Blume said. “We are counting on our own offer investing heavily in the US.
“We are in close contact and good talks with the US government, and we hope that we come to a quick solution also during the next weeks with the support from the US government to our investment.”
US tariffs impacting on the wider auto sector
More broadly across the automotive sector, Trump’s tariffs have triggered disruption and job losses. UK carmarker Lotus confirmed a total of 550 local job cuts, blaming tariff uncertainty and wider industry challenges.
Elsewhere, Jaguar Land Rover announced it would scrap up to 500 management roles following weaker sales partly linked to trade tensions. The company is also facing disruption from a recent cyber-attack which significantly affected its daily operations.
Volkswagen’s willingness to invest in the US shows its commitment to expanding into the world’s second-largest car market. The group is hopeful that the opening of new US-based facilities can protect its earnings and encourage long-term growth.
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