Volkswagen faces multi-billion cash-flow shortfall, according to Bild

Posted on by

The German automaker is reportedly short €11 billion required to finance its operations and investments for the coming year.

Germany’s premier car manufacturer, Volkswagen Group, is reportedly on the brink of a financial crisis, with an anticipated multi-billion-euro cash-flow deficit in 2026, as reported by Bild, citing internal company figures.

According to the newspaper, the German automotive giant expects to be approximately €11 billion short next year, which would prevent it from funding planned expenditures and investments. Volkswagen’s half-year report for 2025 indicated a 33% decline in operating profit compared to the previous year and a negative cash flow of €1.4 billion.

The company’s financial difficulties have been attributed to a dip in profits, weak market performance in China, stiff competition from Chinese brands, and the tariffs imposed by US President Donald Trump.

“Reductions are now being implemented across virtually all areas – in marketing, sales, and certain investments,” a source disclosed to the newspaper. Bild added that several assets might need to be divested to secure “a portion of the billions needed” for the development of new models and advanced technologies. Senior managers reportedly described the situation as “particularly dire” during the transition from combustion engines to electric vehicles.

Germany’s automotive sector is navigating one of its most challenging periods in decades amidst escalating competition from China. Volkswagen, BMW, and Mercedes-Benz all registered lower deliveries in 2025, as demand in the Asian nation –  their largest market –  softened while local electric vehicle manufacturers like BYD gained market share.

German automakers are also under duress from US trade policies. Washington’s 25% tariffs on European-built vehicles have negatively affected sales, and despite an EU-US agreement announced in August that reduced the maximum rate to 15%, ongoing uncertainty continues to impact export and investment strategies.

Meanwhile, Volkswagen has unveiled significant changes in leadership aimed at restoring stability. CEO Oliver Blume will step down from his dual role as head of both Volkswagen Group and Porsche AG, with former McLaren chief Michael Leiters slated to take over at Porsche on January 1. Blume will remain as Volkswagen’s chief executive, concentrating on a comprehensive restructuring and turnaround effort through 2030.