Audi Cuts 2025 Profit Forecast Again Amid U.S. Tariff and EV Transition Pressures

31 October 2025

Audi, the premium-brand arm of Volkswagen Group, has once again revised down its full-year profitability outlook, underscoring the mounting headwinds facing legacy automakers amid rising trade barriers and the costly pivot to electric vehicles.

In its latest update, Audi announced that it now anticipates an operating margin of 4–6% for the year, a marked drop from its previous guidance of 5-7%. The firm, however, maintained its revenue expectations.

The scale of the challenge is significant. Audi reported a 3.2% operating margin in the first nine months of the year, down from 4.5% in the same period last year. One major culprit: U.S. import tariffs alone have cost the company about €850 million in the first three quarters, with full-year losses projected to reach €1.3 billion.

Audi highlighted that its margin forecast assumes stable semiconductor supplies and the absence of further tariff shocks, even as a looming blockade involving Dutch chipmaker Nexperia raises risks for European vehicle production.

The company’s situation offers a window into broader structural pressures in the automotive industry. First, trade dynamics are biting hard: unlike many key rivals, Audi does not currently operate manufacturing plants in the U.S., meaning it bears full brunt of rising import duties. Second, the firm’s transition to electric vehicles and new platforms has faced delays and added costs at a time when competition is intensifying and profit pools are squeezing.

To respond, Audi says it is stepping up cost-control measures and simplifying its operations. The firm is rethinking internal complexity, tightening spending across development and administrative functions, and evaluating whether to establish a U.S. production footprint a decision expected by year-end.

Investor sentiment around the announcement has been cautious. While revenue may hold steady, the margin squeeze raises questions about whether the cost base and investment commitments being undertaken will pay off in the near term. With billions being invested into electrification and global supply chain resilience, the financial architecture of premium automakers is under clearer scrutiny.

For Audi, the deliverables now extend beyond cars built and sold. The firm must show that it can maintain margin momentum even as it reins in drag from tariffs and EV transition costs, and as competition in luxury mobility particularly from challengers leveraging new architectures is sharpening.

In the end, Audi’s repeated downward adjustment of its profitability forecast underscores a critical reality for the automotive sector: even established luxury brands are vulnerable to policy shifts, supply-chain shocks and the heavy investment burdens of transformation. How Audi navigates this period could serve as a bell-wether for legacy manufacturers attempting to bridge the combustion-era past with a profitable electric future.