Volkswagen’s CFO: The More EVs We Sell, the More Our Profits Suffer

October 30 — Arno Antlitz, Volkswagen Group’s CFO and COO, admitted in yesterday’s nine-month results statement: “The better electric vehicles sell, the greater the pressure on our earnings — because at this stage EVs are still less profitable than combustion cars.”

In the first nine months, EVs accounted for 40% of Volkswagen Group’s European orders. The group also faces other pressures: a sharp contraction in China, increasingly fierce price competition from Chinese carmakers in Europe, and US tariffs, all making it harder for its brands to raise margins.

“Our operating margin in the first nine months was only 3.8%,” Antlitz said. “That means for every 100 euros (about 743.7 yuan) of revenue, operating profit is less than 4 euros (about 29.7 yuan). Sustaining that over the long run is not enough. Even in such a tough environment we want to keep investing to give customers competitive cars and the most advanced technology. But to do that, we must improve profitability.”

To that end Volkswagen has drawn up a cost-cutting plan worth about 31 billion euros (about 230.6 billion yuan). Under the plan Antlitz described, the group will slim its model line-up and organisation, cut vehicle manufacturing and administrative costs, raise plant efficiency and speed up technology development.

To improve its finances, Volkswagen plans to cut about 100,000 jobs worldwide through restructuring. It has also warned that it cannot guarantee production assignments beyond 2031–2034 for its four German plants in Emden, Zwickau, Hanover and Neckarsulm, leaving their long-term future unclear.

Facing sustained pressure on profitability, Volkswagen stressed that it must turn things around quickly: “We have no time to waste and must act fast and decisively.”