Volkswagen AG reported second-quarter revenue of €80.8 billion and operating profit of €3.83 billion, both just shy of market expectations. The operating margin edged up to 4.7%, but first-half net income fell 36.6% to €4.0 billion as higher U.S. tariffs and restructuring expenses weighed on results. The German carmaker said U.S. import duties imposed in April shaved about €1.3 billion from earnings in the first six months of the year. Performance at premium brands Porsche and Audi was hit especially hard, with Audi’s quarterly operating result down 64%. Deliveries in the United States dropped almost 10%, even as global volumes inched 1.3% higher. Facing the tariff drag, Volkswagen lowered its 2025 guidance. It now expects sales to be broadly flat rather than grow up to 5% and sees an operating return on sales of 4–5%, down from 5.5–6.5% previously. Automotive net cash-flow projections were trimmed to €1–3 billion, from €2–5 billion. Chief Financial Officer Arno Antlitz said the margin would land toward the upper end only if a Japan-style 15% tariff is agreed between Washington and Brussels. Chief Executive Officer Oliver Blume told investors the company is in “good discussions” with the U.S. government about an “attractive” investment package, potentially including the first Audi production facility in the country, in exchange for tariff relief. While bilateral trade talks between the European Union and the United States continue ahead of an August 1 deadline, Blume said Volkswagen is prepared to accelerate cost-cutting should tariffs remain elevated.