Key events
Diesel issue
On September 18, 2015, the US Environmental Protection Agency (EPA) publicly announced in a “Notice of Violation” that irregularities in relation to nitrogen oxide (NOx) emissions had been discovered in emissions tests on certain Volkswagen Group vehicles with 2.0 l diesel engines in the USA. This was followed by further reports on the scope of the so-called diesel issue. More detailed information can be found in the “Litigation” section.
As of fiscal year 2025, the effects of the diesel issue are no longer disclosed separately as special items. Expenses of €0.1 billion were recognized in connection with the diesel issue in the reporting year.
PRODUCT STRATEGY REALIGNMENT AT PORSCHE
In fiscal year 2025, Dr. Ing. h.c. F. Porsche AG (Porsche) resolved to realign its product strategy, which specifies that the market launch of certain all-electric vehicles is to be postponed. In addition, models with combustion engines are to be offered for longer. Specifically, development of the planned new electric vehicles platform is to be rescheduled for the 2030s. In collaboration with other Volkswagen Group brands, the platform is to be redesigned from a technological standpoint. This rescheduling resulted in an impairment loss on capitalized project costs as well as expenses from the recognition of provisions for outstanding obligations of €2.0 billion, which were recognized in the Volkswagen Group’s cost of sales. This affected not only Porsche, but also the Progressive brand group.
Goodwill impairment at Porsche
As part of the business planning adjustment at Porsche, the Volkswagen Group tested the goodwill allocated to the Porsche operating segment for impairment in the third quarter of 2025. The Porsche operating segment comprises the Porsche brand excluding those activities assigned to the Financial Services segment. This resulted in a non-cash impairment loss of €2.7 billion, which was recognized in other operating expenses of the Volkswagen Group. The impairment test was conducted using a discounted cash flow calculation that reflects the medium-term operating return on sales of 10 to 15% targeted by Porsche. The recoverable amount was €48.0 billion. Furthermore, the measurement assumed a long-term growth rate of 1% (December 31, 2024: 1%) and a weighted average cost of capital (WACC) before tax for the Passenger Cars segment of 9.8% (December 31, 2024: 10.8%).
Restructuring in the Volkswagen group
In fiscal year 2025, the Volkswagen Group recognized restructuring costs of €1.3 billion, mostly in other operating expenses. They are primarily attributable to AUDI AG, CARIAD SE and Volkswagen Sachsen GmbH. They were offset in this context by income of €0.3 billion from the reversal of personnel-related provisions at AUDI AG, most of which was recognized in cost of sales.
Effects of the increased import tariffs imposed by the USA
Under a new trade agreement between the EU and the USA, a tariff of 15% for imports of European vehicles and vehicle parts into the USA was agreed in the third quarter of 2025. This arrangement applies retroactively from August 1, 2025, replacing the punitive tariffs of 25% in force since April 2025 and the standard tariff rate of 2.5%. Furthermore, tariffs of 25% have applied to vehicle imports from Mexico since April 2025. In addition, new import tariffs of 25% on mid-sized and heavy trucks entered into force as of November 1, 2025. Alongside the increased tariffs on vehicles and vehicle parts sold, the operating result was also weighed down by impairment losses for the measurement of vehicle inventories at net realizable value, as well as by higher provisions required for warranty obligations. In total, the increased import tariffs imposed by the USA resulted in expenses of €2.9 billion in the reporting year, which were recognized in cost of sales.
CO2 FLEET REGULATION
In the reporting year, expenses totaling €0.5 billion were recognized for Europe, in accordance with applicable EU regulations, for provisions in connection with the CO2 fleet regulation; they are presented in cost of sales. In addition, under the One Big Beautiful Bill Act of July 4, 2025, there was a legislative change in the USA for missing emissions targets in the US market. Overall, income recognized in this context was slightly outweighed by expenses for further US regulations in the reporting year.
Material transactions of the current fiscal year
Rivian
In June 2025, as part of its cooperation with the US electric vehicle manufacturer Rivian Automotive, Inc., Irvine/USA (Rivian), Volkswagen invested a further USD 1 billion in the ordinary shares of Rivian on the basis of the agreement entered into in the previous year. As a result, Volkswagen’s equity interest in Rivian has risen to 12.3%. The purchase price was based on a defined average market price for the ordinary shares of Rivian plus a premium. The investment in Rivian is measured at fair value through other comprehensive income in the consolidated financial statements.
Placement of TRATON SE shares
In March 2025, Volkswagen completed the placement of 11 million shares in TRATON SE, Munich (TRATON SE) at a price of €32.75 per share with a total value of €0.4 billion via its subsidiary Volkswagen International Luxembourg S.A., Strassen/Luxembourg. The placement corresponds to an interest of 2.2% in TRATON SE’s share capital and reduces the direct interest in TRATON SE from 89.7% to 87.5%. In connection with the transaction, Volkswagen made known its intention to alter its shareholding to 75% plus 1 share in the medium term.
Northvolt AB
The Swedish company Northvolt AB, Stockholm/Sweden (Northvolt), in which the Volkswagen Group holds an equity investment, filed for bankruptcy in Sweden on March 12, 2025. As a result, inclusion of the investment in the consolidated financial statements using the equity method ended as of March 31, 2025. This resulted in a non-cash loss of €0.1 billion, which is reported in the share of the result of equity-accounted investments. The loss is primarily the result of realizing currency translation effects, which had previously been recognized directly in equity. They were reclassified from other reserves attributable to equity-accounted investments to the share of the result of equity-accounted investments. The carrying amount of the investment had already been written down in full in fiscal year 2024. The write-down of the carrying amount of the investment and of the loan receivables from Northvolt resulted in a total non-cash expense of €0.7 billion in the previous year, which was recognized in the other financial result.
Material transactions of the previous fiscal year
Cooperation with Rivian
The Volkswagen Group (Volkswagen) and US electric vehicle manufacturer Rivian announced their intention to establish a joint venture in June 2024. After reaching technical milestones and obtaining the necessary official approvals, Rivian and Volkswagen Group Technologies, LLC, Palo Alto/USA (Rivian and Volkswagen Group Technologies) commenced activities on November 13, 2024. The two partners hold equal shares in the joint venture, which operates as an independent company. It is included in the consolidated financial statements as a joint venture using the equity method.
The aim of the partnership is to develop next generation software-defined vehicle (SDV) architectures to be used in future vehicles of both companies. The joint venture builds on Rivian’s software and electronic architecture to facilitate the joint development of best-in-class architectures and software for the SDVs of both partners.
Volkswagen is planning to invest up to USD 5.8 billion in Rivian and the Rivian and Volkswagen Group Technologies joint venture by no later than January 2028. An initial investment in Rivian was made in June 2024, taking the form of an unsecured convertible note of USD 1 billion, which was converted into 95,377,269 ordinary shares of Rivian on December 3, 2024. Volkswagen thus holds around 8.6% of the outstanding class A shares of Rivian, representing a share of around 8% of the voting rights. The investment in Rivian is measured at fair value through other comprehensive income in the consolidated financial statements. When Rivian and Volkswagen Group Technologies commenced operations, Volkswagen invested a further USD 1.3 billion, in particular for the acquisition of the licenses in Rivian’s existing architecture technology and for the 50% share of the joint venture. When certain financial and technical milestones are reached in 2025, 2026 and 2027, Volkswagen expects to make further investments of up to USD 3.5 billion in the form of equity and debt, of which up to USD 2.5 billion will be for ordinary shares of Rivian; these investments are expected to be made in two tranches of USD 1 billion each in 2025 and 2026 and a third tranche of USD 0.5 billion in 2027 or, at the latest, at the beginning of January 2028. The price of the shares is to be determined ahead of each purchase date on the basis of a defined average market price for the ordinary shares of Rivian plus a premium. In 2026, an additional amount of USD 1 billion can be drawn as a loan by Rivian and Volkswagen Group Technologies and passed on to Rivian.
In fiscal year 2024, the conditional commitment to purchase additional ordinary shares of Rivian resulted in an expense from the measurement of a derivative of €409 million. This was set against a gain of €126 million on the measurement of the convertible note due to the positive performance of the Rivian share price. These non-cash amounts were recognized in the other financial result.
Argo AI
The process of winding down Argo AI, LLC, Pittsburgh/USA initiated in the third quarter of 2022 was completed in the third quarter of 2024. The inclusion of the investment in the consolidated financial statements using the equity method was ended as of September 30, 2024. This resulted in a non-cash gain of €0.3 billion, which was reported in the share of the result of equity-accounted investments. The gain was the result of realizing currency translation effects, which had previously been recognized directly in equity. They were reclassified from other reserves attributable to equity-accounted investments to the share of the result of equity-accounted investments.