Volkswagen Reports €5.82 Billion Q3 Loss on Porsche Write-Down

Volkswagen reported a net loss of €5.82 billion for the third quarter, sharply wider than the €1.07 billion loss recorded in the same period last year, as a substantial write-down on the value of Porsche and weak performance in China weighed heavily on results. The loss was driven by special items totaling €7.8 billion, alongside a challenging market environment in China, increasing competitive pressures, and a higher proportion of lower-margin electric vehicles in sales.

The most significant factor contributing to the loss was a €6.4 billion impairment on the goodwill associated with Porsche, reflecting lowered expectations for the sports car brand’s future development. While non-cash, this write-down significantly impacted the Group’s operating profit. This follows a period where Porsche, once a key profit driver for the conglomerate, has faced increasing challenges including a significant downturn in the Chinese market, US tariffs, and adjustments to its EV strategy.

Group revenue decreased by 6.3% to approximately €75.3 billion in the third quarter. Despite the losses, CFO Arno Antlitz noted that the operating margin, excluding special items, was 3.8%, though he acknowledged this was insufficient to support future investment. The company is pursuing a cost-cutting program targeting a reduction of €31 billion in expenses, potentially impacting up to 100,000 jobs across the Group. Vehicle deliveries also fell, declining nearly 14.3% to 1.89 million units, with a particularly steep 38.5% drop in China, where sales totaled just under 406,000 vehicles.

The company had already lowered its full-year profit forecast in September, projecting an operating profit margin of around 1% for 2026, down from a previous range of 4.0 to 5.5%. The situation in China is expected to remain difficult, with the potential for a noticeable loss for the full year. The Group recorded an operating loss of €113 million in its Chinese joint ventures during the first nine months of the year, attributed to a write-down related to the MEB electric vehicle platform.

Volkswagen's nine-month net loss reached €2.72 billion, compared to a profit of €3.4 billion in the same period last year. The results underscore the significant financial headwinds facing the automaker as it navigates the transition to electric vehicles and contends with a challenging global economic landscape, particularly in the crucial Chinese market.