Volkswagen's Double Crisis: 19,000 Jobs at Risk After $1.5 Billion Driverless Car Deal Collapses
Published on 07/04/2026 at 14:34 | Redaktion boerse-global.de
Volkswagen investors are bracing for a pivotal week as two crises converge: a historic cost-cutting drive that could shutter German plants for the first time, and the collapse of a billion-euro automated-driving partnership with Bosch. The stock has been hammered, but a glimmer of recovery on Friday offered no respite from the underlying turmoil.
The shares closed at €75.00 on Friday, up 2.6 percent on the day and posting a modest weekly gain of 0.81 percent. That bounce from the 52-week low of €69.20 recorded on July 1 hardly masks the scale of the damage — the stock remains down nearly 30 percent since the start of the year and 31 percent below its December high of €109.10. The Relative-Strength Index of 35.8 signals deeply oversold territory, a technical reflection of weeks of relentless selling pressure.
Underlying the market pessimism is a stark operating picture. Volkswagen’s operating profit crashed 53 percent in 2025, and chief executive Oliver Blume has set a target of lifting margins to between 8 and 10 percent. To get there, management has drawn up plans to eliminate 19,000 jobs in Germany alone, with up to 100,000 roles potentially at risk globally over the medium term. For the first time in the company’s history, domestic plants are on the chopping block: Hannover, Emden, Zwickau and Neckarsulm have all been named as targets.
Should investors sell immediately? Or is it worth buying Volkswagen?
The board meets this Thursday to vote on the restructuring, and the political temperature is rising. German Chancellor Merz has publicly urged the preservation of the factories, limiting Blume’s room for manoeuvre. Worker representatives and the state of Lower Saxony hold powerful positions on the supervisory board and have historically blocked deep cuts. Analysts warn that watering down the plan would disappoint capital markets, while a decisive green light could help the stock form a floor. The next hard data arrives on July 23, when Volkswagen unveils its half-year results.
Complicating Blume’s recovery narrative is the abrupt end of the “Automated Driving Alliance” with Bosch — a four-year, €1.5 billion project that was meant to run until 2029. Volkswagen’s software subsidiary Cariad and Bosch have now pulled the plug, with media reports citing a lack of competitive progress, especially on Level-3 systems where the driver can temporarily cede control. Cariad blamed unexpected shifts in European market and technology conditions. The partners did manage to develop an AI-based Level-2 system, which Volkswagen plans to deploy in the ID.EVERY1 — a €20,000 entry-level electric model set to roll off the line in Portugal in 2027.
Blume is pivoting to a buy-over-build approach. Instead of further in-house development, Volkswagen will purchase hardware and software for automated driving from external partners. The British AI startup Wayve, which specialises in foundation models for traffic scenarios, has emerged as a leading candidate. A contract with a new software partner is expected by the end of September. But the move has ignited internal opposition: Cariad’s works council warns that handing over driver-assistance systems means surrendering know-how, value creation and the company’s technological future.
The triple challenge — restructuring, profit recovery and a reset of the autonomous-driving strategy — has brought Volkswagen to a decisive crossroads. Thursday’s board vote will signal whether Blume commands enough support to push through the most radical overhaul in the company’s modern history, or whether political and labour resistance will force a diluted outcome that leaves the stock drifting lower.
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