VW cost-cutting measures likely to affect electric US models

According to Manager Magazin, at the end of September, Group CFO Arno Antlitz and his three brand colleagues, David Powels (VW Passenger Cars), Jürgen Rittersberger (Audi) and Jochen Breckner (Porsche) held a conference call to discuss measures to improve net cash flow. Antlitz is said to have demanded an additional cash flow of twelve billion euros for the coming year alone. This is not only a large amount, even by VW standards, but also extremely short-term. There is talk of a ‘massive savings shock’.

The background to these demanded savings: Net cash flow indicates how much money remains after all costs, including investments, have been deducted and is seen as an important indicator of a company’s financial strength. Antlitz is said to have set a figure of five billion euros as the absolute minimum for Wolfsburg by 2024. In its latest profit warning in September, VW gave an estimate of “around zero billion euros” for the current year. According to Manager Magazin, the company is even expecting a negative net cash flow of around seven billion euros for 2026. As a result, twelve billion euros are now to be saved in the short term in order to reach the target minimum of five billion euros.

The well-known problem is that things are not running smoothly at the moment, with former cash cows such as Porsche, as well as the markets in China and North America, no longer generating as much money as they used to. Therefore, effective short-term cost-cutting measures or additional sources of income must now be found. The North American business is being hit by US President Trump’s car tariffs, especially for Group brands that do not manufacture in the US – namely Audi and Porsche.

US production of the ID.4 on hold

But the end of the US tax credit for electric cars is also having an impact on VW’s planning: As announced at the beginning of September, VW will temporarily halt production of the MEB SUV ID.4 at its Chattanooga plant (Tennessee) at the end of October. The current article does not specify a timeframe for the production pause, but as with other car manufacturers, the end of the subsidy is likely to have played an important role here.

Another project is also said to be affected, namely the Scout brand, which was developed as the “hope for North America.” An electric SUV and a pickup truck with the same drive system had been announced, which were later to be offered with an optional range extender, but BEV-first. Now, according to the magazine report, the Scout models will “initially only be available with a combustion engine as a range extender – and not purely battery-electric.” Instead of a plus of one billion euros in the original plans, VW is now “likely to end up with a loss of around one billion euros in the current year.”

The situation in North America could also have an impact on management. Kjell Gruner, CEO of Volkswagen Group of America and the VW brand in North America since mid-December 2024, is “already considered to be on the ropes again.” Within the brand organisation, VW brand boss Thomas Schäfer is also said to have filled a number of positions in the USA with new people. The goal is to stabilise the business with a new strategy – and with fewer staff.

In his quest to save billions, the group’s CFO Antlitz is said to have considered reducing long-term investments even further – but after being convinced that this was not possible, the focus of cost-cutting shifted to shorter-term goals. One of the alleged cost-cutting ideas is for the second generation of the Porsche Taycan and the next Audi A6 to share a common architecture, even though they are two very different models. This would probably reduce costs, but it might also reduce profits: putting sports cars on saloon platforms for cost reasons has rarely been good for sales.

manager-magazin.de (in German, paywall)

This article was first published by Sebastian Schaal for electrive’s German edition.