Volkswagen’s squeeze widens as board fights, China weakness and new EV plans collide
Published on 07/17/2026 at 07:01 | Redaktion boerse-global.de
Volkswagen is being pulled in three directions at once: a cost base that still sits well above competitors, a boardroom that cannot agree on key personnel and plant decisions, and a Chinese market that is no longer doing the group any favours. Taken together, the pressure is forcing chief executive Oliver Blume into a harsher restructuring push, with Reuters reporting that as many as 100,000 jobs could be cut on top of the 50,000 positions already agreed in earlier savings rounds.
The scale of the strain is showing up in the numbers. In the first half of 2026, Volkswagen delivered 4.13 million vehicles worldwide, down 6 percent from a year earlier. China remained the weak spot: deliveries there fell 25.9 percent, while battery-electric vehicle deliveries in the January-to-June period dropped 47.9 percent. A separate company update put second-quarter 2026 global deliveries down 8.6 percent, with China off 36.6 percent. The broader market backdrop in China has not helped either, after GDP expanded by just 4.3 percent in the second quarter.
That operational deterioration is feeding directly into labour tensions. Blume has pointed to a 20 percent cost gap versus rivals as the reason for deeper cuts. Four German sites are on the list of potential changes: Emden, Hannover, Zwickau and the Audi plant in Neckarsulm. Volkswagen’s supervisory board has already rejected plant closures by 12 votes to 7, while the works council blocked the planned restructuring on 9 July. The future of those locations is now tied to whether the group can come up with viable alternative uses after 2030.
Personnel politics are adding another layer of friction. The appointment of Erika Rasch as chief human resources officer has been delayed again. She is regarded as Blume’s preferred candidate, but the labour side wants a new technology department led by a chief technology officer who would unite technology, development and purchasing, and be filled by someone from the union camp. Porsche and Piëch, the controlling family camps, have so far rejected that idea. Until the deadlock is broken, brand chief Thomas Schäfer continues to cover the personnel brief on an interim basis.
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Volkswagen is still trying to reshape its industrial footprint at the same time. Battery production is already running in Salzgitter, and Valencia is scheduled to follow in 2027 through the PowerCo subsidiary. The group also plans to reduce its model range from 150 variants to no more than 100 and cap total capacity at 9 million vehicles. Elsewhere, the company is considering producing Chinese models in Europe, a move that could give Zwickau a lifeline while sharpening the debate over trade policy and local value creation.
Politics has already started to move into the vacuum. Saxony’s economy minister, Dirk Panter of the SPD, called on Thursday for EU import tariffs on Chinese electric cars to be doubled from their current range of 7.8 to 35.3 percent. His aim is to improve the odds of attracting a Chinese joint venture to the threatened Zwickau plant. In Osnabrück, Lower Saxony is examining whether to take a stake in a new production company that would allow Israel’s Rafael to make Iron Dome components there. The plan would split the business into two entities, one holding the property and one handling operations, but Qatar, a major shareholder, opposes the joint venture, and state backing would only come if the project proves commercially viable.
Market valuation suggests investors have already written in a great deal of risk. A Handelsblatt analysis said Volkswagen trades on a price/earnings ratio of just 3.4, versus an average of 15 for the DAX, while the dividend yield stands at 7.4 percent. The same study said the combined net profit of Germany’s three major carmakers fell to EUR 19.8 billion in 2025 from EUR 48 billion in 2022, a decline of 59 percent, while dividend payouts dropped from EUR 15.4 billion to EUR 8.6 billion over the same period. A Commerzbank analyst cited by the paper warned of further profit declines, pointing to weak China volumes, the cost of the shift to electric vehicles and US tariffs.
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Volkswagen does, however, have at least one fresh product launch to point to. On 16 July, the ID. Cross made its world debut. The electric SUV will start at EUR 28,000, measure 4.15 metres in length and offer up to 436 kilometres of range depending on specification. European sales are due to begin in autumn 2026, and production will take place among other locations in the Spanish plant of Landaben. Whether that is enough to offset the group’s structural problems in Germany is something investors are likely to find out soon enough, with detailed half-year figures due on 24 July 2026.
Volkswagen’s shares remain under pressure. At Thursday’s close, the stock stood at EUR 73.30 in one market update and EUR 73.50 in another, with the latter showing a 1.18 percent decline on the day. Over the past 30 days, the shares have lost 15.40 percent, and year to date they are down 30.73 percent. The stock is now 32.81 percent below its 52-week high of EUR 109.10, reached in December 2025, and only 6.21 percent above its 52-week low of EUR 69.20, marked on 1 July. The relative-strength index is at 40, signalling a market that is damaged but not yet deeply oversold.
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