VW and Mercedes-Benz Warn of Profit Hits Amid Trade Tensions and Tariffs

Automakers Warn of Profit Impacts

• ⚠️ Volkswagen now expects its annual operating profit margin to be at the lower end of its forecast, around 5.5%, following a 40% drop in Q1 earnings.
• 💡 The company cited challenges in making profits on battery electric cars as a contributing factor to its Q1 performance.

Tariffs and Trade War Uncertainty

• 📈 Mercedes-Benz saw a 41% fall in earnings before interest and taxes (EBIT) and has withdrawn its 2025 earnings guidance due to uncertainty over trade wars.
• 🌍 Both Volkswagen and Mercedes-Benz are increasingly factoring the impact of US tariffs and geopolitical tensions into their financial outlooks.

Broader Industry Impact

• 📉 Several other major automakers, including General Motors, Stellantis, and Volvo Cars, have also suspended or withdrawn their financial forecasts.
• 💰 Porsche reported a financial hit of nearly $114 million in April and May alone, directly attributed to tariffs.