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Volkswagen Group Reports Mixed Start To FY 2025 Amid Strong Electric Vehicle Sales And Cost Discipline Focus
The Volkswagen Group's first quarter of 2025 showed mixed results. Sales revenue increased by 2.8% to EUR 77.6 billion compared to the previous year. However, the operating result fell to EUR 2.9 billion, with an operating margin of 3.7%. The decline was attributed to negative price/mix effects and higher fixed costs, alongside special effects amounting to approximately EUR 1.1 billion.
In Western Europe, demand for Volkswagen's electric vehicles surged, with every fifth car sold being fully electric. This led to a significant increase in order intake by 29% compared to the previous year. The order backlog grew substantially, reaching nearly one million vehicles, with orders for electric vehicles rising sharply by 64%.
Volkswagen's vehicle sales in Q1 2025 rose by 0.9%, totalling 2.1 million units. Growth in Europe and South America offset declines in North America and China. European sales increased by 4%, while South America saw a significant rise of 17%. In contrast, North American sales dipped by 2%, and China experienced a decline of 6%.
The Group's financial outlook for the year anticipates a sales revenue increase of up to 5%. The operating return on sales is expected between 5.5% and 6.5%, excluding recent tariff impacts. Investment ratios in the Automotive Division are projected between 12% and 13%, with net cash flow ranging from EUR 2 billion to EUR 5 billion.
The Core brand group reported an increase in sales revenue by 8% year-on-year but faced a drop in operating margin to 3.2%. Excluding special effects, the margin was at 4.6%. Meanwhile, the Progressive brand group saw its operating result improve slightly to EUR 0.5 billion due to an improved mix despite CO2 provision challenges.
Sport Luxury brands experienced a decline in sales revenue by 4%, primarily due to lower volumes and increased costs in China. This resulted in a significant drop in operating profit to EUR 0.7 billion, with an operating margin of 8.7%. TRATON Group also faced challenges, with sales revenue down by 10% due to reduced sales at Scania, MAN, and International.
Financial Services and CARIAD
CARIAD's sales revenue rose by an impressive 33% due to license income from software delivered in the previous year. However, it recorded an operating loss of EUR -0.8 billion; before restructuring expenses, this loss stood at EUR -0.6 billion despite higher depreciation costs.
Group Mobility saw a slight increase in contract volume within Financial Services, contributing significantly to Group net income with an operating result of EUR 0.9 billion—well above last year's level due to improved volumes.
Future Challenges
The Volkswagen Group anticipates several challenges ahead due to political uncertainties and increasing trade restrictions globally. Geopolitical tensions and volatile markets for commodities and energy also pose risks alongside stricter emissions regulations.
The company remains committed to maintaining robust financing and liquidity policies despite these challenges. Adjustments in reporting logic from January will lead to more precise disclosures of automotive sales revenue and investment ratios.
The Volkswagen Group continues its global operations with over nine million vehicles delivered worldwide last year across more than 150 countries. The company remains focused on shaping future mobility through investments in electric vehicles, digitalisation, and sustainability initiatives.
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