Results of Operations

Results of operations of the Group

In the period from January to December 2025, the Volkswagen Group generated sales revenue of €321.9 (324.7) billion, which was on a level with the previous year. The rise in vehicle sales excluding the Chinese joint ventures, and the positive sales revenue performance of the Financial Services Division had a beneficial effect, while exchange rate trends had an adverse impact. 80.5 (80.9)% of the Volkswagen Group’s sales revenue came from outside Germany. Gross profit decreased by €8.2 billion to €51.2 billion. As a consequence, the gross margin declined to 15.9 (18.3)%.

The Volkswagen Group’s operating result amounted to €8.9 (19.1) billion in fiscal year 2025. The operating return on sales was 2.8 (5.9)%. The year-on-year decline was due in particular to non-cash impairment losses on goodwill and capitalized project costs, as well as other expenses in connection with Porsche’s adjusted product planning totaling €4.7 billion. Additional expenses of €2.9 billion arose in connection with the increase in import tariffs introduced in the USA at the beginning of April 2025. CO₂ fleet regulation in Europe also weighed on earnings, as did negative mix, price and exchange rate effects, and rising expenses for the establishment of the Battery business field. Adverse impacts from restructuring measures halved in the reporting year compared with the prior-year figure.

The financial result was up on the previous year at €0.4 (−2.3) billion. The share of the result of equity-accounted investments improved compared with the previous year. Adverse effects in connection with the equity investment in Northvolt weighed on this item in both periods; these effects were higher in the previous year than in the reporting year. Declining interest income reduced the interest result. The other financial result increased in fiscal year 2025, due primarily to positive factors affecting net income from securities and funds, while the prior-year period had been adversely affected in particular by impairment losses recognized in connection with the equity investment in Northvolt.

SHARE OF SALES REVENUE BY MARKET 2025

in percent

SHARE OF SALES REVENUE BY REPORTABLE SEGMENTS 2025

in percent

In fiscal year 2025, the Volkswagen Group’s earnings before tax decreased by €7.5 billion to €9.3 billion. The return on sales before tax declined to 2.9 (5.2)%. Income taxes resulted in an expense of €2.4 (4.4) billion, which in turn led to a tax rate of 25.8 (26.3)%. In July 2025, an amendment to the Körperschaftsteuergesetz (KStG – German Corporate Income Tax Act) was adopted in Germany. As a result, the corporate income tax rate will be reduced in stages from 15% to 10% from 2028 onwards. In fiscal year 2025, this led to a gain of €0.9 billion from the measurement of deferred tax assets and deferred tax liabilities of the German Group companies. In contrast, the impairment loss recognized on Porsche’s goodwill did not reduce the tax burden, resulting in a Group tax rate on a level with the previous year. At €6.9 billion, earnings after tax declined by €5.5 billion on the previous year.

Results of operations in the Automotive Division

In the period from January to December 2025, the Automotive Division recorded sales revenue of €290.4 (290.6) billion, which was on a level with the previous year. The rise in vehicle sales excluding the Chinese joint ventures had a beneficial impact, while exchange rate trends had an adverse impact. At €244.5 (241.5) billion, sales revenue in the Passenger Cars and Light Commercial Vehicles segment was similar to the previous year. It, too, was affected by the rise in vehicle sales excluding the Chinese joint ventures, offset by adverse exchange rate trends. The Commercial Vehicles segment generated €42.5 (46.2) billion, a noticeable decrease on the previous year primarily because of a decline in volumes. As our Chinese joint ventures are accounted for using the equity method, the Group’s business performance in the Chinese passenger car market is essentially reflected in the Group’s sales revenue only through deliveries of vehicles and vehicle parts.

Cost of sales increased faster than sales revenue than had been the case in the prior-year period. This item related primarily to higher material costs and expenses in connection with Porsche’s adjusted project planning, as well as adverse impacts resulting from the increase in import tariffs introduced in the USA in April 2025 and from CO₂ fleet regulation in Europe. The Automotive Division’s primary research and development costs in the reporting year amounted to €19.4 (21.0) billion, down −7.7% year-on-year; their share of the Automotive Division’s sales revenue – the research and development ratio (R&D ratio) – decreased to 6.7 (7.2)%. The automotive investment ratio, which combines the R&D and capex ratios, declined to 11.8 (13.0)%. In addition to the environmentally friendly orientation of our product portfolio, the focus was mainly on the expansion of our battery expertise, the development of software and new platforms, and the creation of new technologies. The capitalization ratio was 48.1 (48.7)%. The research and development costs recognized in profit or loss rose to €18.4 (18.0) billion, due especially to the impairment loss recognized on capitalized project costs at Porsche.

In fiscal year 2025, distribution and administrative expenses and their respective share of sales revenue were virtually unchanged compared with the previous year. The other operating result decreased to €−4.7 (−4.1) billion due mainly to the impairment loss on the goodwill allocated to the Porsche operating segment. In addition, higher negative exchange rate effects weighed on this item. Adverse impacts from restructuring measures halved in the reporting year compared to fiscal year 2024. In addition, the fair value measurement of derivatives to which hedge accounting is not applied had a beneficial impact.

In the period from January to December 2025, the Automotive Division’s operating result decreased by €11.0 billion to €5.3 billion. The year-on-year decline was due in particular to non-cash impairment losses on goodwill and capitalized project costs, as well as other expenses in connection with Porsche’s adjusted product planning. Additional expenses arose in connection with the increase in import tariffs introduced in the USA at the beginning of April 2025. Moreover, CO₂ fleet regulation in Europe weighed on earnings. Changes in the mix, pricing and exchange rates and rising expenses for the establishment of the Battery business field also weighed on earnings. Adverse impacts from restructuring measures halved in the reporting year. The operating return on sales decreased to 1.8 (5.6)%. The Passenger Cars and Light Commercial Vehicles segment’s operating result amounted to €5.0 (13.7) billion, marking a decline in the period from January to December 2025 due primarily to the factors outlined above. In the Commercial Vehicles segment, lower volumes were the main drivers of the €1.8 billion reduction in the operating result to €2.4 billion. With regard to our equity-accounted Chinese joint ventures, our operating result essentially only considers income from deliveries of vehicles and vehicle parts, as well as license income, as these joint ventures are included in the financial result on a proportionate basis.

Results of operations in the Financial Services Division

Boosted by higher volumes, the Financial Services Division’s sales revenue rose to €62.1 billion in fiscal year 2025, up 5.7% on the prior-year figure. Cost of sales increased more slowly than sales revenue amid a volume-driven rise in depreciation of the residual values of leased vehicles. As a result, gross profit increased to €9.7 (8.1) billion.

The Financial Services Division’s operating result of €3.7 (3.1) billion was up on the previous year, due mainly to higher volumes and margins. The prior-year period had been negatively impacted by foreign exchange losses in connection with the deconsolidation of Volkswagen Bank Rus. The operating return on sales increased to 6.0 (5.3)%. The return on equity before tax was 7.4 (6.8)%.