Volkswagen Suspends Electric Golf Development as Quarterly Loss Reaches €5.822 Billion
Key Facts
Volkswagen has suspended development work on the next electric Golf at its Wolfsburg facility, according to a Reuters report citing an internal memo sent to employees on Friday. The decision puts a project intended to support the future of the German plant near the end of the decade under cost-cutting pressure. Thomas Schäfer, CEO of Volkswagen’s volume brands, said the company understood the importance of the Golf to the brand and to Wolfsburg. “I know what the Golf means to Volkswagen and to Wolfsburg, so this decision was not easy for us,” he added. Schäfer said the company “cannot afford this work at the moment.”
The suspension coincided with weak financial results for the group. Volkswagen reported an after-tax loss of €5.822 billion in the third quarter of 2026, compared with a loss of €1.072 billion in the corresponding period of 2025. Quarterly revenue was €75.277 billion, down 6.3% from €80.305 billion a year earlier. In the first nine months of 2026, revenue fell to €233.4 billion from €238.7 billion in the same period. Nine-month operating result fell to €0.1 billion, compared with €5.4 billion a year earlier.
The results show a gap between reported performance and profitability before special items: the group posted an operating result before those items of €8.8 billion in the nine months, with an operating return on sales of 3.8%. Chief Financial and Operating Officer Arno Antlitz said this return was “far too low to continue investing heavily,” despite electric vehicles accounting for 40% of the order book. He added that U.S. tariffs were weighing on the company, the Chinese market was contracting and competition in Europe was intensifying. Antlitz also said Volkswagen currently makes less profit on electric cars than on combustion-engine cars. Group sales were 5.9 million vehicles in the nine months, down 11% from 6.6 million in the same period of 2025.
The Associated Press attributed pressure on quarterly results to large one-off charges, weak demand in China, U.S. tariffs and lower profits from electric vehicles. The impact included a €6.4 billion write-down in the value of Volkswagen’s stake in Porsche. The company had cut its 2026 operating return on sales forecast on September 18 to a maximum of 1%, from a previous range of 4% to 5.5%. In the same update, it forecast annual revenue of about €315 billion, compared with €321.9 billion in 2025. It also cited a deteriorating market environment, particularly in China, and an accelerating shift in demand toward electric vehicles as factors that weakened its outlook.
The development suspension comes as the company carries out a broader reorganization of its German plants. The agreement announced by Volkswagen targets a reduction of about 734,000 units in production capacity in Germany and annual savings of more than €15 billion over the medium term. Under the agreement, production of the Golf and Golf Estate will move to Puebla, Mexico, starting in 2027, while Wolfsburg will focus on two assembly lines instead of four. The plan also includes cutting about 4,000 technical development jobs in Wolfsburg by 2030. These measures are separate from the decision to suspend development of the electric Golf, which sources did not directly link to the job-cutting plan.
Volkswagen had said in its agreement that Wolfsburg’s future would be supported by the introduction of an electric Golf and another model based on its future electric-vehicle architecture near the end of the decade. The future plan also aims to gradually reduce the model range by as much as 50% and cut the complexity of the available configurations by as much as 75%. On orders and deliveries, the company said its global deliveries after three quarters were about 9% below the same period a year earlier, while deliveries in China fell 30.2%. The operating margin in the first half of 2026 was 3.8%, compared with 4.2% in the corresponding period of 2025. These figures reflect the pressures that the comprehensive cost program, worth about €31 billion, is intended to address.
In trading on October 29, Volkswagen shares traded under the symbol VWAGY closed at $7.79, compared with $7.73 at the previous session’s close. The company listed publication of its interim report for the January-to-September period for October 29, 2026. It was also scheduled to take part in the UBS European Conference in London on November 11, followed by the RBC Capital Markets Global Industrials Conference in New York on November 17. These dates follow the nine-month results, which showed an operating result before special items of €8.8 billion. The company had described its 3.8% margin as far too low to continue investing heavily.