Audi retracts forecast: Trump tariffs and China weakness weigh on sales

Bad news for Volkswagen shareholders: The Group's subsidiary Audi has revised its forecast for 2025 downwards. The premium manufacturer cites President Trump's punitive US tariffs and the high costs of restructuring the company as negative factors. This has put renewed pressure on the shares of parent company Volkswagen.

Specifically, the Audi Group – which also includes the luxury brands Bentley, Lamborghini, and the motorcycle manufacturer Ducati – now expects an operating return on sales of only between five and seven percent for the current year. Previously, the range was an optimistic seven to nine percent. US President Trump's tariffs, costs for the company's restructuring, and weak business in China caused Audi's profit to collapse in the first half of the year. €1.3 billion after taxes represents a loss of 37.5 percent. This is the third time in a row that the first half of the year has been significantly worse than the previous year.

Several construction sites

Audi is fighting on several fronts. In the first half of the year, deliveries fell in most key markets, including North America and the once-profitable China. There, European manufacturers are increasingly losing market share to strong local competition, led by BYD. Audi is now attempting to counteract this by renewing its model range. The launch of ten new plug-in hybrid models is planned by the end of the year.

Added to this is the burden of US tariffs, which currently stand at 15 percent following an agreement between the US and the EU. "The effects of the recently reached tariff agreement are currently being assessed," Audi said in a statement. Chief Financial Officer Jürgen Rittersberger emphasized during a conference call that they also want clarity on the final tariff rates for Mexico. Audi produces the Q5, an important SUV model there that is a top seller in the US.

Lagging behind in e-mobility?

Not everything is going smoothly with its future e-mobility strategy either. In the past, Audi has announced promising model projects to compete with competitor Tesla, only to later postpone or cancel them altogether. While the brand has launched new electric models such as the Q6 e-tron, there are doubts as to whether they can keep up technologically. For example, battery performance is lacking compared to BMW's upcoming "New Class," which will be unveiled in September.

Analysts also share this critical assessment. "The days when Audi was considered an innovation leader in the automotive industry are over," UBS analyst Patrick Hummel explained before the figures were released. "It remains to be seen whether the substance of the new products is sufficient to impress consumers and achieve the right price points."