Volkswagen indicates shortage of Chinese chips would hit profits

"Volkswagen has signalled that its annual profit targets are at risk without sufficient computer chips, in the latest sign that an expected shortage of semiconductors from China could hit carmakers across Europe. The struggling German automotive firm said a series of cost cuts and new model launches were helping to offset a slump in Chinese demand, but it added that forecasts were based on the adequate availability of semiconductors."

"It forecast an operating profit between 2% and 3% for the full year but said US trade tariffs were dragging on its most popular cars. The levies are expected to cost 5bn (4.4bn) this year, said Arno Antlitz, VW's chief financial officer. Volkswagen reported a 1.3bn operating loss after a U-turn on its EV strategy at its subsidiary Porsche, announced in September, set it back 4.7bn in writedowns."

Volkswagen warned that annual profit targets are at risk without sufficient semiconductors and tied forecasts to adequate chip availability. Cost cuts and new model launches are helping to offset a slump in Chinese demand. EU carmakers may have to close production lines as supplies from Nexperia dwindle after Beijing banned exports following a Dutch government takeover and the suspension of the company's Chinese chief executive amid US security concerns. VW sold 6.6m cars in the first nine months of 2025 and forecast a 2–3% operating profit for the year. US trade tariffs and a Porsche EV strategy U-turn created significant financial pressure.

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