Porsche’s operational collapse threatens Volkswagen’s profits in 2025
Porsche, the flagship and most profitable brand of the Volkswagen Group, experienced a dramatic drop in operational profit in 2025 — falling from €5.3 billion in 2024 to only €90 million, a 98% decline. This means Volkswagen has nearly lost its chief source of profit, with operational margins shrinking from 14.5% to just 0.3%. Porsche also forecasts further sales declines in 2026.
The primary reason for this collapse is the loss of market share in China, combined with higher US tariffs. Although Porsche invested heavily in electric vehicles, many customers still prefer combustion engine cars. Volkswagen Group also reported a sharp decline in earnings: operating profit halved to €8.9 billion, while net profit fell 44% to €6.9 billion. These are the lowest figures since the 2016 diesel scandal. Meanwhile, total revenue dropped 3%, reaching €322 billion.
Despite the revenue decline, the volume of car sales was not significantly affected. This crisis may trigger a major restructuring within Volkswagen and a strategic rethink of its global market approach.
