Volkswagen expects full-year revenue squeeze after quarterly profit slump

German auto giant Volkswagen on Friday reported weaker-than-expected second-quarter profit, citing the discontinuation of its top electric vehicle in the U.S. and negative mix effects, as it revised down its sales forecast for 2026.

Europe's biggest carmaker posted an operating profit of 3.5 billion euros ($3.98 billion) for the April to June period, down nearly 10% from a year ago and missing expectations of 4.3 billion euros, according to an LSEG-compiled consensus.

The company also flagged it expects sales revenue in 2026 to develop within a range of -3 to 0% compared with the previous year, versus a previous forecast of 0 to 3%.

The results come shortly after the company confirmed it is looking to cut up to 100,000 jobs, twice as many as previously stated, as it seeks to counter a profit slump amid billions of euros in tariff costs and intensifying competition from Chinese car brands.

In a widely reported memo to staff earlier this month, CEO Oliver Blume said that the group's costs were 20% higher than comparable businesses and the company would therefore need to reduce costs even further.

Blume reportedly said the company had been unable to confirm alternative uses for four German factories previously threatened with closure. These refer to Volkswagen's plants in Hanover, Zwickau, Emden, and the group's Audi facility in Neckarsulm.

Volkswagen said in April that it would end production of the ID.4 electric sports utility vehicle out of its Tennessee plant amid a challenging U.S. environment for EVs.

The automaker had agreed a deal with unions in late 2024 to avoid factory closures in Germany and rule out compulsory redundancies until the end of 2030.

Shares of Volkswagen are down nearly 30% year-to-date. Volkswagen was down 3.3% in premarket trading ahead of the open.