Volkswagen admits EVs earn less than combustion cars

Volkswagen has openly acknowledged that its electric cars are less profitable than its combustion-engine models. Group CFO and COO Arno Antlitz said as much in the company's nine-month statement: "the market success of our electric cars is an additional burden on earnings, because today we earn less on them than on cars with combustion engines."

The group's EV range keeps expanding, but financial results are not improving at the same pace. Volkswagen faces mounting pressure from Chinese brands, tougher competition in Europe and US tariffs. Operating margin after the first nine months of 2026 stood at 3.8%, a level Antlitz said makes it hard to fund investment in new models and technology over the long term.

A regulatory squeeze

Volkswagen has little room to slow its electrification. It cannot simply cut EV sales or make up the shortfall by selling more combustion cars, because it needs a growing share of zero-emission vehicles to lower its fleet-average CO2 emissions and avoid heavy penalties under EU rules. Demand offers some comfort: EVs made up 40% of Volkswagen's European order book in the first nine months of 2026.

The planned entry-level EV adds to the tension. The production version of the ID. Every1 concept is due in 2027. A lower price could draw more buyers to electric cars, but it risks squeezing margins further.

Cost cuts and job losses

To respond, Volkswagen has prepared a cost-reduction programme worth about €31 billion. It includes simplifying the model range, trimming organisational structures, cutting production and overhead costs, making better use of factory capacity and speeding up technology development. Up to 50% of models could eventually disappear, and the company wants to sharply reduce the number of parts it uses. The future of Seat is under review, with no decision yet.

Volkswagen plans to cut roughly 100,000 jobs worldwide. It also warned that it cannot guarantee future production allocations for four German plants: Emden, Zwickau, Hanover and Neckarsulm. Immediate closures have not been announced, as the company is weighing alternative uses, but further output cuts and plant closures remain possible. Antlitz stressed that restoring profitability quickly is the priority and that the measures should not be delayed.