Volkswagen’s Summer Checkpoint: Audi Cuts Deep, but the Balance Sheet Still Has a Lifeline
Published on 08/12/2026 at 18:12 | Redaktion boerse-global.de
Volkswagen heads into the second half of the year with a rare mix of pressure points and potential offsets. On one side sits a weakening earnings picture, a fresh cut to Audi’s outlook and an unresolved fight over restructuring. On the other is a still-visible demand pulse for electric models and a planned multibillion-euro asset sale that could ease the financial strain.
The latest warning came on 27 July, when Audi trimmed its 2026 guidance sharply. The subsidiary now expects revenue of EUR 58 billion to EUR 63 billion and an operating margin of just 5% to 7%, blaming weak markets in China and the US as well as geopolitical tensions. One analyst immediately lowered Volkswagen’s price target from EUR 99 to EUR 90, although the rating stayed at Buy. HSBC followed on 28 July, cutting its target for the preferred shares from EUR 133 to EUR 127 and also keeping a Buy view.
Those revisions landed after Volkswagen had already downgraded its own 2026 sales outlook on 24 July. The group now forecasts revenue growth of minus 3% to 0%, having previously guided for plus 0% to plus 3%. Its operating margin target remains unchanged at 4.0% to 5.5%.
Recent results underline why the market has grown cautious. In the second quarter, the group’s net profit fell 32.9% to EUR 1.54 billion, while operating profit dropped 9.5% to EUR 3.5 billion. Volkswagen said the quarter was hit, among other things, by around EUR 0.5 billion of costs tied to the production stoppage of the ID.4 in North America. Vehicle deliveries also weakened, sliding to 2.08 million units, with China particularly soft: deliveries there fell 36% to 424,300 vehicles.
The first half, however, was not uniformly bleak. Operating profit for the period rose 4.5% to EUR 3.6 billion, helped by overhead cost cuts. And there are still pockets of strength in the product pipeline. More than 70,000 orders were placed for the new Electric Urban Car Family, including the ID. Polo, in the first half, while electric-vehicle orders in Europe climbed 50% in the second quarter. Volkswagen has also launched advance sales of new full-hybrid drivetrains for the Golf and T-Roc in Germany, with the Golf Hybrid priced from EUR 41,400.
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Even so, the operational story is being overshadowed by the restructuring debate. On 9 July, the supervisory board rejected a broad cost-cutting plan from management. According to the investigative outlet Correctiv, the board is now preparing an extraordinary general meeting to push through the package, which could affect up to 100,000 VW employees. The program is due to be brought back in September, after staff meetings scheduled for the end of August.
The proposed changes are wide-ranging. Four plants are reportedly in play: Hannover, Zwickau and Emden on the Volkswagen side, and Neckarsulm at Audi. Closures are said to be tied to the end of production cycles for the relevant models. Separately, the supervisory board has still not agreed on a new personnel chief after Gunnar Kilian’s departure, leaving a power struggle between labor representatives and owners unresolved. Volkswagen has also denied unconfirmed rumors of a shake-up at the top of sales.
The group is simultaneously trying to reshape its asset base. At the end of June, Volkswagen finalized an exclusive agreement with Bain Capital to sell 51% of its motor subsidiary Everllence for about EUR 7.4 billion, while retaining 49% in the medium term. The deal is expected to support the balance sheet if approvals arrive as planned by the end of 2026.
The share price reflects that uneasy mix of risk and optionality. Volkswagen preferred shares are down 27.66% since the start of the year and trade around 31% below the December high of EUR 109.10. They are also about 19% below the 200-day average of EUR 91.71 and 2.86% under the 50-day average of EUR 77.56. At EUR 74.06, the stock sits just about 7% above the 52-week low of EUR 69.20.
For now, investors are left watching a single metric that may decide whether the turnround narrative survives the summer: the operating margin. Volkswagen is sticking to its 2026 target range of 4.0% to 5.5%, but the second quarter’s 4.2% and the first quarter’s 3.3% leave little room for disappointment. If the margin slips further below 4% in the third quarter, or if Everllence approval takes longer than hoped, the market is likely to challenge the guidance again.
A later test is already pencilled in for year-end, when the supervisory board is expected to rule on the savings package and the 2030 target picture. Together with the hoped-for completion of Everllence approvals, that decision may determine whether Volkswagen can turn a difficult year into a credible reset.
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