Letter to our Shareholders
Decide, act, deliver: for the Volkswagen Group, 2025 was all about pitching in and turning ideas into actions. We have forged ahead with our strategic plan, bringing inspiring and exciting products to the public and translating our technical expertise into tangible added value for our customers. 2025 saw us show the world what the new strength of the Volkswagen Group is all about. We made progress in technology, software, design and quality. Our new products have been very well received and have won numerous awards. At the same time, we were carefully aligning our Company with the increasingly demanding underlying conditions and challenges around the world. The transformation of the entire Company is continuing to pick up speed. We are shaping change in a dynamic environment with a clear goal: we aim to become The Global Automotive Tech Driver. We will continue systematically driving forward this transformation in 2026.
With around 9 million vehicles delivered worldwide in 2025, we were close to reaching the previous year’s figure – all within a dynamic market environment. We are stronger than ever in our home market of Europe, where we have expanded our share of the market to 25% and increased deliveries by more than 4% to further cement our position at the top. The host of new models launched onto the market this year have proved to be very popular with our customers. This contrasts with the expected declines we experienced in North America (–10%) and China (–8%) as a result of challenging market conditions. However, we succeeded in recording significant growth in South America (+12%), in Asia excluding China (+9%) and in the Middle East/Africa (+10%).
Sales revenue amounted to approximately €322 billion, putting it close to the prior-year level. Operating profit was approximately €8.9 billion, which is significantly less than in 2024. This decline was mainly attributable to high special effects and US tariff policies. Net cash flow in the Group Automotive division increased by €1.3 billion to €6.4 billion and as a consequence net liquidity came in at around €34.5 billion. We further strengthened our position for 2026 with strong financial momentum in the final quarter.
The results reflect the Volkswagen Group’s ability to hold its ground in a challenging global environment. The fact that we achieved them in a phase of restructuring and with considerable costs highlights the strength of our substance, as well as our resilience. And the fact that the capital markets look favorably on the path we have taken and the progress we have made is becoming increasingly apparent in our share price. The price of Volkswagen preferred shares grew by around 16% in 2025. For comparison: the EURO STOXX Automobiles & Parts sector index fell by 4% over the same period. Factoring in the dividend on top of this gives our shareholders a total annual performance of no less than 24%.
The Board of Management and the Supervisory Board will be proposing a dividend of €5.26 per preferred share for fiscal year 2025 at the Annual General Meeting in June. That is in line with our unchanged dividend policy, which looks for a payout ratio of at least 30%, and our three-pronged approach of strengthening financial foundations, making the investments we need for our future and ensuring investor attractiveness. As previously announced, we did not include the non-cash goodwill amortization of Porsche AG in the assessment basis, thus resulting in a payout ratio of 30% of the net result. The calculated payout ratio is 39%.
Our TOP 10 programs for the Group and our brands remain a key tool in managing our operations and strategic activities. With ambitious goals, clear definitions of responsibility, measurable milestones and a systematic roadmap, they provide us with guidance. This year, too, we have set ourselves an ambitious TOP 10 program. In 2026, we will be paying particular attention to expediting the implementation of our cost work with the aim of securing the long-term success of our brands with attractive products in our core regions and ensuring the effective management of the Volkswagen Group and its brand groups.
Our performance programs for our brands, companies and regions have already made an important contribution to increased financial robustness within our Group. With these programs, we are safeguarding our financial and strategic ambitions with concrete, measurable actions. As a result, we were also able to offset much of the impact of the numerous headwinds.
The power of Volkswagen Group lies in the strength of our brands. Our products excite and inspire our customers – and, as a result, boost our Company’s competitiveness and its opportunities for growth. We launched around 30 new models in 2025, pushing forward with the product campaign initiated in the previous year. We reinforced our portfolio across all brands and segments, fine-tuned our designs and continued to raise the bar for quality with measurable results.
Our innovative strength was particularly on show in the field of e-mobility. Our global deliveries of all-electric vehicles rose by 32%, with sales figures rising by as much as 66% in our home market in Europe. With a market share of 27% in Europe, we are not only leading the competition in all-electric vehicles, our share has even overtaken the share of business with ICE vehicles for the first time. Five of the ten highest-selling all-electric models in Europe come from our Group. Order figures for Europe increased by 21%.
And we’re not stopping there. 2026 will see us bringing over 20 new models to customers around the world, covering all of the various drive systems. In China in particular, we are shifting into delivery mode. Volkswagen Group China will be stepping things up a notch thanks to the biggest product campaign in its history and the first ever models designed in China, for China, which are positioned to become strong competitors in terms of design, technology and cost.
In parallel to this, we will be using our electric urban car family in Europe to showcase how we can take the strength of our Group to the market. Four models, three brands, one platform. Intelligent scaling, employed to achieve customer benefits in a way that only Volkswagen knows how: we are delivering e-mobility with premium technology adopted from higher-class vehicles, all at an entry-level price. With our all-electric compact models from Volkswagen, CUPRA and Škoda, we are tapping into a segment with high growth potential from a position of strength.
Our sense of corporate responsibility for sustainable growth and our aspirations when it comes to profitability call for clear and responsible decision-making, especially in Germany. The Zukunft Volkswagen agreement is a crucial cornerstone of this: it brings competitiveness and job security into alignment on a sustainable basis and also protects the Company’s structural realignment at the level of both business operations and collective bargaining.
Audi, Porsche and our software subsidiary CARIAD have also set out comprehensive agreements and launched their own cost programs. In total, around 50,000 jobs are due to be cut by 2030 across the Volkswagen Group in Germany. As a result of collective bargaining agreements and downsizing measures, we managed to achieve cost savings of around €1 billion in fiscal year 2025 as planned. We are on course to meet our goal of achieving net annual cost savings of more than €6 billion across the Group by 2030.
Noticeable progress has also been achieved in the implementation of our restructured global software strategy: our development processes are quicker, we are integrating software into our vehicles even more effectively and we are bringing new functions to production vehicles in even less time thanks to over-the-air system updates that do not require customers to visit a workshop. We have technically restructured and reorganized our software subsidiary CARIAD, it is now significantly leaner – and more effective. As an overarching software unit, it is now able to really play to its strengths. Our software has begun receiving several awards in comparative testing.
We are working on offering our customers around the world a superior range of digital services, adapted to the different needs and regulations in the various regions. Substantial progress is being made by our joint venture with US company Rivian. Together, we are creating the Group’s electronic architecture of the future for the western hemisphere. Around one year on from the joint venture’s creation, the very first test mules for the Volkswagen, Audi and Scout brands are undergoing their first winter tests in spring 2026. The new zonal architecture and software architecture are scheduled to be used for the first time in our ID. Every1 compact electric car, launching in 2027.
We are already one step further ahead in China, as required by market conditions there. In the space of just 18 months, working with Xpeng, we transformed the China Electronic Architecture from an idea into a cutting-edge E/E architecture that is ready for use in series production. At the same time, we are creating the technological basis for a wide range of hybrid and all-electric models in higher segments. Simultaneously, we are ramping up development of highly automated driving. Our joint venture established by CARIAD and Horizon Robotics is developing a proprietary Group chip for this for the first time. This is how we are accelerating the development process, increasing our flexibility and reducing costs.
In China, we are demonstrating just how quickly, flexibly and consistently the Volkswagen Group is able to adapt to a fundamentally shifted market and go on the offensive. With our “In China for China” strategy, we are switching into delivery mode after less than three years of transformation.
By the end of 2027, we will have launched 30 new all-electric, plug-in hybrid and range-extended models onto the Chinese market. Our strong position in the combustion engine market continues to be a key pillar of our transformation and was further consolidated in 2025.
In China, we have increased the pace of development by up to 30%, while at the same time setting up a very competitive cost base. This is experience that we are carrying over to other regions. Our models developed in China also enable us to tap into export opportunities in new markets.
In the USA, we are firmly aligning our activities with the dynamic competitive environment, specific customer requirements and the evolving tariff situation. We are strengthening the independence of our brands and, with the electric revival of the iconic Scout, are making the most of strategic opportunities in the growing segment of large SUVs and pickups. Our focus is on highly flexible range extender technology, which perfectly combines a battery-electric drive system with a petrol-powered range extender. Our plans for Scout are on track, and we are giving our utmost to prepare for the next step of launching this new brand. At the same time, we are exploring the possibility of localizing the production of imported vehicles from our brands in the North American market.
The future of mobility is electric – and the battery is the key. We are the first European manufacturer to develop and produce battery cells on a large scale with our subsidiary PowerCo. The unified cell provides us with a global, cross-brand platform that reduces complexity and taps into economies of scale. As a crucial element within our electric strategy, it is expected to be used in series production for the first time in our electric urban car family.
In late 2025, we began operations in the Group’s first cell factory, which is based in Salzgitter. With this step, we are safeguarding our technical knowledge, industrial expertise and greater independence along the value creation chain. With the ramp-up of our cell factory in Valencia and the premiere of our first LFP cell, we are expanding our technological spectrum to a further mainstay of e-mobility.
What makes the Volkswagen Group so unique is our global team – people full of passion, expertise and genuine team spirit, this is a team who knows how to get stuck in, shape change and deliver progress – across every brand, every company and every region. To them I extend an extra special thank you, on behalf of both myself and the entire Board of Management.
In 2026, we will continue our journey – together and with a sense of determination. Our focus is clear: strong products, impressive technologies and consistent work on enhancing our competitiveness. Our ambition for 2030 is to achieve an 8% to 10% operating return on sales. This will be built on strict cost and investment discipline. However, we won’t be taking this approach just for the sake of cutting costs. It is essential for new investment, growth and a successful future for the Volkswagen Group. The bedrock is our successful realignment of the last three years. We have delivered on our promises and achieved some of our goals ahead of schedule. At the same time, our world has changed dramatically over the past three years. We need to comprehensively transform our Company in the coming years based on what we have achieved so far. We see that our business model of past decades no longer works in today’s world. Because of regional market conditions, changes in trade policy, massive regulatory requirements in the various regions of the world and our high-cost position, above all in Europe. That is why we must rework our business model in light of the new environment. It means further developing our product portfolio – tailored specifically to the world regions and their own profit pools. It means refining our technology and software offerings. And, at the same time, it means further improving our financial substance and streamlining the Volkswagen Group’s structure and steering model. We will keep you informed about the next steps over the course of the year.
Huge opportunities lie ahead of us. We will be making the most of them. We hope you will join us as we continue to forge ahead with our strategic goals and create sustainable value. Thank you for your trust and support.
Yours very sincerely,
Oliver Blume