Audi's profits decline significantly due to a payment of 600 million dollars in tariffs
Audi, a renowned subsidiary of the Volkswagen Group, has faced a significant decline in profitability in 2023 and the first half of 2025. The company's net profit dropped by 37.5% year-over-year, from approximately €4.4 billion in the first half of 2022 to €1.3–1.35 billion in the same period of 2025.
The primary causes of this profit decline are the tariffs imposed by U.S. President Donald Trump, costs for corporate restructuring, and weak business in China. Audi's U.S. tariffs burdened the company with approximately 600 million euros in the first half, as stated by Chief Financial Officer Jürgen Rittersberger. Unlike BMW, Audi does not have its own U.S. plant and has not passed on the additional costs to its U.S. customers.
In China, sales have declined by about 10% due to intense competition and economic uncertainties. This weak performance in an important regional market has also negatively influenced overall global vehicle deliveries, which dropped 5.9% in the first half of 2025, further pressuring profitability.
Audi's ongoing corporate restructuring efforts, including cutting up to 7,500 jobs in Germany by 2029, targeted to save over €1 billion annually, have also contributed to lowered earnings and caused short-term financial pressure. The costs of corporate restructuring, including job cuts and provisions, have contributed to Audi's current decline, with 600 million euros being a part of the first-half result.
Despite these challenges, Audi's push into electric vehicles (EVs) showed strong growth, with EV deliveries up over 32% year-over-year in early 2025, indicating a strategic shift that may help future profitability. The "Future Agreement" has offset half of the burden from corporate restructuring provisions.
Chief Financial Officer Jürgen Rittersberger stated that the company is pleased to have some predictability now. He also emphasised the necessity of the initiated transformation and the need for the company to continue to move forward at full speed with it.
Audi has lowered its forecast for the current year, with a revenue expectation of 65 to 70 billion euros and a significantly lower profit margin. No details about the EU's trade agreement with the U.S. have been factored into Audi's current forecast. The company aims to save over one billion euros per year through continued transformation.
In conclusion, Audi's profitability in 2023 and early 2025 has declined sharply due to the compounded effects of increased U.S. tariffs, costly restructuring efforts, and weakened demand in China, although growth in EV sales provides a hopeful offset for future gains.
In light of the company's challenges, Audi aims to save over one billion euros per year through continued transformation in the business sector, focusing on areas such as finance and restructuring. The costs of corporate restructuring, including job cuts and provisions, have contributed to Audi's current decline, with 600 million euros being a part of the first-half result.
