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Volkswagen flagged €10 billion in negative one-off items that will weigh on its 2026 results, the company said on Friday. Around €6 billion of that sum stems from a writedown on its 75.4 percent stake in Porsche after the sports car maker issued new mid-term assumptions reflecting weaker performance expectations. The remaining charges include €2 billion for asset writedowns in China, the sale of its Osnabrück plant and costs tied to an expanded early retirement scheme.
The automaker now expects an operating profit margin of 1 percent at most for 2026, a sharp reduction from its previous guidance of between 4.0 percent and 5.5 percent. This adjustment comes amid a further deterioration in the market environment, particularly in China, as well as an accelerated shift in demand toward battery-electric vehicles that generate lower profits. The company indicated the changes would result in lower outlooks for both the Audi and Volkswagen passenger car brands.
Finance chief Arno Antlitz addressed the challenges in an interview published on the company intranet. “The situation on global markets has continued to worsen – particularly in China,” he said. “Demand for battery-electric vehicles has accelerated, partly against the backdrop of the geopolitical situation and a sharp rise in petrol prices, and we currently earn significantly less from these than from internal combustion engine cars,” Antlitz added. He also stated in an internal memo seen by Reuters that the group had no time to lose.
Shares in Volkswagen fell as much as 7.5 percent following the announcement according to trading data while Porsche shares dropped 3.3 percent and its majority owner Porsche SE lost 4.9 percent. The weakness extended to peers with BMW, Mercedes-Benz Group and Ford Motor also seeing declines. The reaction underscores investor concerns over the depth of the crisis facing Europe’s largest carmaker.
The profit warning deepens ongoing restructuring efforts at Volkswagen which recently agreed with unions on measures that could lead to 100,000 global job cuts double the initial plan. The overhaul includes potential plant closures in Germany and a simplification of the group’s structure to counter competition from Asian manufacturers and US tariffs. Industry records compiled by Reuters show that such cuts if completed would surpass General Motors’ reduction of 74,000 positions in the early 1990s and rank among the largest in automotive history.
This marks Volkswagen’s second substantial writedown related to Porsche in 12 months. The company recorded a €5.1 billion impairment in September 2025 after Porsche altered its product strategy away from electric vehicles and reduced its profit targets. Porsche sales have fallen sharply in China where it has also faced challenges with its electric model lineup.
A Reuters report from June detailed how Volkswagen has slipped to third place in China the world’s largest auto market after years as the leader with local competitors gaining ground through superior technology and pricing. Chinese brands now control nearly 70 percent of the passenger vehicle market according to the China Passenger Car Association while the overall market has contracted more than 20 percent in recent months. Profits from China have plunged more than 80 percent over the past decade contributing to a halving of group profit margins between 2021 and 2025.
