Volkswagen absorbed a €500mn first-quarter charge after halting electric vehicle production at its Tennessee plant. The German automaker ceased manufacturing the battery-powered ID.4 in Chattanooga, shifting production to a petrol sport utility vehicle. Operating profits fell to €2.5bn, down from €2.9bn in the prior year, with VW shares sliding 2.4% in Frankfurt trading.
The US market shift has caused widespread disruption. Stellantis, which took a €22bn charge to unwind its EV strategy, returned to quarterly profit of €377mn by pivoting back to petrol models. Automakers collectively have taken at least $75bn in impairments adjusting strategies following the Trump administration's withdrawal of the $7,500 consumer tax credit.
VW's American EV sales plummeted more than 80% year-on-year in the first quarter, reflecting the industry's struggle against changing regulatory environments. The carmaker stressed the need for fundamental business model transformation while facing the complex challenge of rapidly increasing EV sales in Europe to meet regulatory requirements.
Source: Financial Times Companies · Summarized by HeadlinesBriefing