Volkswagen Group H1 2026 Net Profit Drops 35.73%; Lowers Full-Year Guidance

Volkswagen Group reported revenue of €15.81 billion for the first half of fiscal year 2026 (January to June), down 0.17% year-over-year. Gross profit amounted to €2.421 billion, a decline of 8.32% compared to the same period last year, resulting in a gross margin of 15.3%, down approximately 1.4 percentage points. The operating return on sales stood at 3.8%, down 0.40 percentage points year-over-year. Net income attributable to shareholders totaled €2.574 billion, down 35.73% year-over-year, with both basic and diluted earnings per share at €5.11, a decrease of 35.88%. Operating cash flow reached €5.868 billion, up 77.01% year-over-year. The Automotive Division generated net cash flow of €3.16 billion, turning around from a negative €1.4 billion in the same period last year. During the reporting period, the Group delivered 4.1257 million vehicles globally, down 6.3% year-over-year, including 438,500 fully electric vehicles, a decline of 5.8%. Regional performance diverged: deliveries increased in Europe and South America but declined significantly in North America and Asia-Pacific—particularly in China, where Volkswagen brand deliveries fell by 26% year-over-year. The profit decline was primarily driven by a one-time charge of approximately €5 billion related to the discontinuation of ID.4 production in the U.S. and an unfavorable shift in product mix. Although higher revenues from the Financial Services segment partially offset the negative impacts from lower deliveries in China, foreign exchange fluctuations, and changes in product mix, overall profitability remained under pressure. Given the current market environment—particularly the pronounced weakness in Chinese automotive demand—the Group has revised its full-year guidance for fiscal 2026 downward: it now expects vehicle deliveries to decline by 7.0% to 3.0% year-over-year, revenue to decrease by 3.0% to flat, and an operating return on sales in the range of 4.0% to 5.5%.