Volkswagen Stock: Profit Plunge Despite Rising Sales

Volkswagen's latest quarterly results paint a conflicting picture for investors, as the automaker reported a significant drop in operating profit despite modest gains in sales figures. The company's operating profit plummeted by 40% to €2.8 billion in the first quarter of 2025, falling well short of the €4 billion analysts had anticipated and down considerably from €4.6 billion in the same period last year. This disappointing performance caused the operating margin to shrink from a solid 6.0% to a concerning 3.6%.

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Not all news was negative, however. Volkswagen managed to increase its overall vehicle deliveries by 1.4% during the quarter, with electric vehicle sales surging impressively by nearly 60% to 150,000 units, particularly in European markets. The company also reported a modest 3% increase in revenue, reaching approximately €78 billion. This growth was overshadowed by exceptional charges totaling €1.1 billion, including €600 million in provisions for potential EU penalties related to missed CO2 fleet targets and €200 million for reorganization costs at its software subsidiary Cariad. Political developments, including potential changes to US tariff policies, provided temporary relief for the stock, though long-term challenges remain.