Audi has experienced a challenging first half of 2025, marked by a substantial decline in operating profit and overall vehicle deliveries. The German luxury automaker attributes these setbacks primarily to escalating tariffs and an ongoing internal restructuring. Despite this downturn, the company has seen a notable increase in electric vehicle (EV) sales, although this growth has not been enough to offset broader financial pressures. Audi's financial performance reflects a wider trend affecting the Volkswagen Group, which has also reported reduced earnings. The company is actively working to revitalize its portfolio with new models and strategic realignments to navigate the current economic landscape and strengthen its long-term viability.
The current financial climate presents a formidable challenge for Audi, as it grapples with reduced demand in key markets and the impact of trade policies. The company's efforts to innovate and expand its electric and hybrid offerings are crucial for its future, yet these initiatives require significant investment and time to yield substantial returns. The situation underscores the complexities facing established automakers as they transition towards electrification while contending with global economic shifts and competitive pressures. Audi's revised financial forecasts indicate a realistic outlook on the path ahead, emphasizing the need for strategic agility and sustained transformation to regain momentum and secure profitability in an evolving automotive industry.
Navigating Economic Headwinds: Audi's Financial Struggles
Audi's first-half financial results for 2025 reveal a difficult period, with the luxury automaker experiencing a notable decline in profitability and vehicle deliveries. The company's after-tax profits plummeted by 37% to €1.35 billion, and operating profit saw an even sharper drop of 45% to approximately €1.1 billion. This downturn is largely attributed to the full impact of tariffs and extensive restructuring efforts. Deliveries across all major markets—North America, China, and Europe—witnessed declines, contributing to an almost 6% decrease in total global deliveries. This challenging environment underscores the intense competitive pressures and the significant costs associated with the brand's transformative initiatives.
The broader economic environment, characterized by increased tariffs, has severely affected Audi's financial standing. Jürgen Rittersberger, Audi CFO, highlighted that these tariffs, combined with the brand's internal restructuring measures, have significantly impacted financial performance. The company's sales figures underscore this struggle, with approximately 794,000 models delivered in the first half of 2025, a stark contrast to the previous year. Specifically, North American deliveries fell by 9%, while China and Europe saw reductions of 10% and 4% respectively. Furthermore, uncertainty surrounding electric vehicle (BEV) incentive programs has also suppressed consumer demand in several regions, adding another layer of complexity to Audi's operational challenges. This combination of external trade policies and internal strategic overhauls has created a demanding scenario for the company, necessitating a recalibration of its financial projections and operational strategies.
Strategic Shifts and Electric Vehicle Growth
Despite the overall financial contraction, Audi has found a silver lining in the robust growth of its fully electric vehicle (EV) sales. The company delivered over 101,000 electric models globally in the first half of 2025, marking an impressive 32% increase. This surge was primarily driven by popular models such as the Audi Q4 e-tron and Audi Q6 e-tron, which accounted for a significant portion of these deliveries. This positive trend in EV adoption, however, has not translated into higher overall profitability, reflecting a broader industry challenge where increased EV sales often coincide with lower profit margins for manufacturers, a phenomenon also observed within the Volkswagen Group.
Audi is currently undergoing a massive portfolio renewal and strategic realignment, aiming to introduce ten new plug-in hybrid models by the end of 2025. This ambitious plan is designed to cultivate the youngest product lineup in the premium segment, signaling a strong commitment to future mobility solutions. Gernot Döllner, Audi CEO, emphasized that this realignment extends beyond product offerings to encompass fundamental changes within the company, focusing on increased efficiency and profitability. While these transformative efforts are essential for long-term success, their benefits are yet to be fully realized. The company has revised its revenue forecast for the 2025 fiscal year, anticipating figures between €65 billion and €70 billion, a reduction of approximately €2.5 billion from previous expectations. This adjustment reflects the ongoing challenges, particularly the vulnerability to tariffs that companies like Audi face, especially when compared to rivals with local production facilities in key markets like the United States.