Volkswagen’s Sales Are Up But Its Profits Are Down

The Volkswagen Group recorded a significant drop in net profit in the first quarter of this year. The drop is as much as 40.6 percent, which means that profit fell to 2.18 billion euros. Although one might think that the reason is a further decline in sales, the data says otherwise. Sales have even increased this year, by 1.4 percent to 2.13 million vehicles.

Although increased demand usually means better business results, in this case, the situation is paradoxical. Namely, the growth in sales is at the expense of electric vehicles, and Volkswagen is making less money on them. Electrification is expensive, and in the case of Volkswagen, the group’s operating margin has fallen from 6% to just 3.7%.

VW Group CFO and COO Arno Antlitz openly admitted that the success of electric models comes at a high price: “This market success of our electric cars is putting pressure on our results. An operating margin of around four percent clearly shows that we still have a lot of work to do.”

He added that it is crucial to reduce production costs and increase the profitability of electric vehicles, especially in the context of global economic instability.

Back in 2023, Antlic announced that electric and petrol/diesel models could have equal profitability by 2025, but that goal has now been pushed back to 2026. New models like the ID.2 and its crossover derivative, which should rival the popularity and earnings of the T-Cross, will play a key role in this. Versions of them under the Cupra and Škoda brands are also expected, all in the €25,000 price range. The cheaper ID.1 model is planned for 2027, with a target price of €20,000.

In Europe, sales of VW Group electric models more than doubled in the first quarter (+113%), while in the US, growth was recorded at 51%. One in ten vehicles delivered worldwide was electric, and in Western Europe, orders for electric models increased by as much as 64% compared to the same period last year. Electric cars now account for more than 20% of all orders in that part of Europe, and Volkswagen is the leader in the electric vehicle market with a 26% share.

VW Group’s best-selling electric models in 2025:

    VW ID.4/ID.5 – 43,700 units

    VW ID.3 – 28,100 units

    Audi Q4 E-Tron/Q4 Sportback – 22,800 units

    Skoda Enyaq/Enyaq Coupe – 20,200 units

    VW ID.7/ID.7 Tourer – 19,100 units

    Audi Q6 E-Tron/Q6 Sportback – 16,000 units

    Porsche Macan (EV) – 14,200 units

    VW ID. Buzz/Cargo – 12,700 units

    Cupra Born – 11,000 units

    Cupra Tavascan – 7,600 units

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