Volkswagen posts €5.860 billion operating loss, misses expectations
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, according to results published on October 29. The after-tax loss was €5.822 billion, versus €1.072 billion a year earlier. The operating loss was deeper than Visible Alpha analysts’ estimate of €2.649 billion for the quarter. The figures show the combined impact of impairments and operating pressures on the company’s results.
Group revenue totaled €233.378 billion in the first nine months, down 2.2% from €238.669 billion a year earlier. In the third quarter alone, revenue fell 6.3% to €75.277 billion. The group had posted operating profit of €5.931 billion in the first half, down 11.6% from €6.707 billion in the same period, with an operating margin of 3.8%. This means profitability was under pressure before the large quarterly loss emerged, although exceptional items deepened its impact in the third quarter.
Volkswagen attributed the decline in earnings to weak market conditions in China, pricing and competition pressures globally, and a higher share of lower-margin electric vehicles in the sales mix. Chief Financial Officer Arno Antlitz said: "U.S. tariffs are weighing on us, the Chinese market is shrinking, and competitive pressure in Europe is increasing significantly." The company added that its current profits from electric vehicles are lower than those it earns from internal-combustion-engine cars. In China, the group’s deliveries fell 38.5% in the third quarter to 405,800 vehicles, from 660,300 in the same period. The sharp decline puts China at the center of the group’s geographic pressures, alongside European competition and U.S. tariffs.
The items included a non-cash impairment of about €6 billion in goodwill associated with the Porsche business. The company estimated the combined negative impact of three exceptional items at about €2 billion in the second half. Expenses also included impairment adjustments to the assets of the group’s companies in China and costs related to the planned sale of the Osnabrück site.
On liquidity, net cash flow in the automotive division rose 144.5% to €4.394 billion in the first nine months, from €1.797 billion in the same period. The division’s net liquidity stood at €32.982 billion on September 30. Volkswagen attributed the improvement in cash flow particularly to lower investment and portfolio management measures. In Europe, total order intake rose 4% to 3.0 million vehicles in the first nine months, compared with 2.9 million a year earlier. These indicators point to improved cash generation and European orders, while lower earnings and revenue and pressure in China remained evident in the period’s results.
The group’s plan includes a comprehensive cost-cutting program of about €31 billion, focused on simplifying models and structures, cutting vehicle costs and overhead, improving factory efficiency and accelerating technology development. In September, Volkswagen lowered its 2026 operating return margin forecast to as much as 1%, from a previous range of 4% to 5.5%, and forecast revenue of about €315 billion. The cost-cutting program remains part of the company’s response to pressure on profitability and competitiveness, as its annual operating margin forecast stands at no more than 1%. VWAGY American depositary receipts closed at $7.73 on October 28, after closing at $7.58 the previous day. The company’s calendar includes the UBS European Conference in London on November 11 and the RBCCM Global Industries Conference in New York on November 17, 2026.