Amid Tariffs and Restructuring Expenses, Audi’s Turnaround Strategy Gathers Strength

[Source: Audi]

The Audi Group, which includes Audi, Bentley, Lamborghini, and Ducati brands, suffered a challenging first half of 2025. Sales and profits are down so far in 2025 and the forecast for the remainder of the year has been revised downward. The U.S. tariff situation and expenses related to the Audi restructuring process are seen as the key factors in 2025 the performance. However, there does appear to be light at the end of the tunnel. 

In the first half of 2025 Audi delivered nearly 794,000 vehicles. That is a decrease of 5.9 percent compared to the same period last year. In North America (excluding Mexico), deliveries are down 9 percent to 98,712 in H1 2025.

“The situation continues to be very challenging. In addition to intense competitive pressure, the drastically increased US import tariffs and expenses for Audi restructuring measures have impacted financial performance in the first half of the year. Uncertainty around incentive programs in the BEV segment has also dampened consumer demand in some markets. At the same time, we are undertaking the biggest transformation in company history,” says Audi CFO Jürgen Rittersberger.

In Europe (excluding Germany), deliveries are down 4 percent and in China (including Hong Kong), deliveries are down 10.2 percent to 231,505 and 287,600 respectively. However, there are some bright spots. Deliveries in Germany were up 0.7 percent to 103,273 and overseas and growth markets saw an increase of 3.2 percent to 62,441 deliveries.

Audi’s electric mobility push continues to gain momentum. 101,381 fully electric vehicles were delivered worldwide in H1. That is an increase of 32.3 percent compared to H1 2024. Battery-electric models (BEV) were particularly popular in France (+196 percent), the Netherlands (+86 percent) and in the home market of Germany (+76 percent). The most popular models were the Audi Q4 e-tron with about 45,000 deliveries and the Audi Q6 e-tron with roughly 36,000 units delivered.

The strong BEV results may bode well for the future but it was not enough to overcome the strain from U.S. tariffs and expenses related to Audi transitioning to new models. By the end of the year, the company will have the youngest portfolio in the premium segment. But those vehicles cost money to develop.

Operating margin plunged to 3.3 percent in H1 2025 compared to 6.4 percent in H1 2024. The Audi Group’s profit after tax amounted to 1,346 million euros after the first six months of the year, down 37.5 percent year on year. Net cash flow totaled 0.9 billion euros in the first half of the year compared to 1.1 billion euros in the same period last year. This was primarily due to the lower earnings level and the acquisition of the remaining shares in Sauber Holding AG in the first quarter. In contrast, working capital improved year on year and had a positive impact on net cash flow.

In light of current market trends, the US tariff situation as well as restructuring expenses in connection with the Audi agreement for the future, Audi has updated the forecast. Audi now expects revenue of between 65 billion euros and 70 billion euros, and its operating margin forecast is now 5 percent to 7 percent for the remainder of 2025. The Audi Group expects net cash flow to reach 2.5 to 3.5 billion euros.