Volkswagen Commercial Vehicles has warned that economic uncertainty, tariffs and regulatory pressures are weighing on profitability, despite growing revenues and a strong order pipeline.
VW's van division delivered more than 400,000 vehicles during 2025, including 60,000 units of the ID Buzz and ID Buzz Cargo, an increase of more than 100%.
Revenue rose to €16.9bn, up 11% year-on-year, reflecting the higher share of battery-electric vehicles within the brand’s mix. However, operating profit fell dramatically, reaching just €245m, resulting in a return on sales of 1.5%, down from €743m in 2024.
Volkswagen Commercial Vehicles CEO, Stefan Mecha (pictured above speaking at the 70th Anniverary of the Hannover plant), described the results as “not satisfactory”, attributing the drop to several external factors which have contributed to pressure the company's profitability.
Wider economic uncertainty and the transition to electric vehicles has proved slower than expected within the light commercial vehicle sector due to infrastructure and costs. Volkswagen said it had to set aside millions to comply with EU CO₂ regulations as the uptake of electric vans has not ramped up as quickly as anticipated.
"In 2025 we had to bill hundreds of millions of Euros as the ramp-up of electromobility, especially in our segment, has been slower than expected. In uncertain times, commercial customers in particular find it difficult to electrify their fleets. What we need is a powerful charging infrastructure and competitive electricity prices," Mecha said.
"Charging must not be more expensive than refueling, and we need greater flexibility in achieving CO2 targets - taking into account market realities and the specific requirements of light commercial vehicles. The situation in North America with tariff issues and the discontinuation of EV incentives in 2025 further complicates our business, and of course, this has an impact on sales of the ID Buzz," he added.
Despite the challenges, Volkswagen said cost-control measures helped stabilise the business. The brand reported a net cash flow of €1bn for the year, driven in part by reduced overhead costs and tighter spending discipline.
The company also reported strong demand heading into the new year, with order intake in 2025 nearly one third higher than the previous year.
"We remain the clear number one in twelve European markets, including our home market, Germany. Across Europe, we rank in a strong second place. Of course, we are not satisfied with this. Of course, we will not rest. Our ambition is to become the number one light commercial vehicle company in Europe," Mecha said.
Also confirmed during the call was updates to the Caddy and Multivan with new facelifts and interior improvements. There will also be revisions to the VW Crafter range and ID Buzz models.
