Volkswagen Posts €5.860 Billion Operating Loss in Third Quarter
Key Facts
Volkswagen Group posted an operating loss of €5.860 billion in the third quarter of 2026, compared with a loss of €1.299 billion in the same period a year earlier, reflecting the scale of pressure on the German company's business. Group revenue fell 6.3% to €75.277 billion from €80.305 billion a year earlier. The figures come as the company proceeds with a broad restructuring plan that includes job cuts and reduced production in Germany. Chief Financial Officer Arno Antlitz said the company "cannot afford to waste any time and must act quickly and decisively." The performance puts profitability and the scale of spending needed for the transformation at the heart of the challenge facing the group.
In the first nine months of 2026, revenue was €233.4 billion, compared with €238.7 billion in the same period of 2025. Operating profit fell to €0.1 billion from €5.4 billion, although the quarterly result and the cumulative performance over the period reflect different time frames. Exceptional items totaled €8.7 billion during the nine months, including €6.4 billion related to an impairment of the goodwill of the Porsche brand and about €1 billion for impairment adjustments to the assets of the group's companies in China. The company describes these items as non-cash, distinguishing their accounting impact from operating cash flows. Even so, the decline in operating profit before exceptional items highlights the weakness of the group's underlying returns as it faces investment costs.
Volkswagen customer deliveries fell to 1.885 million vehicles in the third quarter, down 14.3% year on year. For the nine months, vehicle sales totaled 5.880 million, 10.6% below the same period a year earlier. The CFO said U.S. tariffs are weighing on the company and that the Chinese market is shrinking as competition intensifies in Europe. He added that the operating return on sales before exceptional items was 3.8% after nine months, a level he said was below what was needed to continue investing heavily. These pressures link the declines in sales and margins to challenges in the group's key markets.
Orders for electric vehicles are growing in Europe despite a decline in the group's overall sales. Fully electric vehicle orders on the continent rose 39% in the first nine months compared with the same period of 2025, while total orders in Europe increased by about 4%. The company said electric vehicles accounted for 40% of its European order book at the end of September, and that its urban electric car family had received about 150,000 orders through October 29. These figures point to strong demand for electric models, but come as the company says operating returns are insufficient to support the investment required. Converting orders into profitable sales remains part of the transformation test facing the group.
The agreed plan includes cutting about 50,000 jobs in Germany by 2030 across Volkswagen, Audi, Porsche and Cariad through voluntary and socially responsible measures; Chief Executive Oliver Blume said about 37,000 signed agreements had been concluded at the time his interview was published. Blume said in July that the company might need to cut about 50,000 additional jobs, bringing the potential total cuts to 100,000, and described the additional figure as a theoretical estimate under evaluation. In September, the Associated Press reported that the board had approved a plan to cut 50,000 jobs, halve the model range and end car production at four German plants. But the future of the four plants does not mean they have closed; the company has not described them as closed, and their fate remains unresolved. Thus, the figure of 100,000 refers to a potential total of job cuts, while the announced and agreed implementation remains set at about 50,000 jobs in Germany.
Volkswagen expects customer deliveries of about 8.2 million vehicles in fiscal 2026, amid a marked decline in the size of the Chinese market. The forecast underscores the continuing impact of weakness in China on the group's business volume this year. The estimates follow lower quarterly deliveries and vehicle sales over the nine months, while the company remains under pressure from U.S. tariffs and competition in Europe. Management links the need for swift action to its financial results and its ability to fund investment, as the restructuring plan aims to reduce costs and adjust production levels. Investors and employees are watching the implementation of the job cuts and decisions on the plants, as well as the company's ability to improve returns on its sales.