Volkswagen’s third-quarter earnings missed analyst expectations, sending its shares to their lowest point in 24 years. Earnings per share dropped to €3.34, below projections, with a 67% decline from last year as rising costs, restructuring expenses, and slowing global demand, especially in China, strain the automaker's profitability. Although revenue reached €78.36 billion, slightly surpassing estimates, overall vehicle deliveries fell 7% in Q3, reflecting the impact of increased competition and weakening EV demand in crucial markets like China and Europe.
In response to its financial pressures, Volkswagen has outlined a significant restructuring plan, which includes closing at least three factories in Germany and laying off tens of thousands of employees. The company recorded €2.2 billion in restructuring expenses, mainly linked to its Battery Cell Group and Battery Group Partnerships. Volkswagen also revised its annual forecast, predicting sales revenue of €320 billion, flat compared to last year, and a sharp decrease in net cash flow for its automotive division, down to €2 billion from €10.7 billion in 2023, partially due to a planned joint venture with Rivian.
The automaker faces additional headwinds, including potential regulatory costs from the EU’s tightened CO2 targets and prospective tariffs on Chinese-made EVs, which could prompt retaliatory measures from China. Volkswagen’s stock fell 5% to €90 following the earnings report, marking a 75% drop from its all-time high in 2021, as investors remain wary of the company’s ability to manage high investment needs while sustaining profitability amid slowing EV sales and rising competition.
