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Volkswagen Faces Declining US Sales Amid Tariffs and Incentive Changes

lite News Desk 2 min read

At a glance

  • Volkswagen’s US vehicle sales fell by 13% in 2025 to about 329,800 units
  • US tariffs on imported vehicles cost Volkswagen up to €5 billion annually
  • Electric ID.4 and ID.Buzz were the only Volkswagen models with US sales growth in 2025

Volkswagen experienced a decline in its US vehicle sales and profitability in 2025, as the company faced higher costs from tariffs and changes to federal electric vehicle incentives.

In 2025, Volkswagen’s US sales dropped to around 329,800 vehicles, representing a decrease of approximately 13% compared to the previous year. The majority of Volkswagen’s model lineup in the US saw lower year-over-year sales, with the exception of its electric vehicles, which recorded growth during this period.

Sales of Volkswagen’s SUVs in the US also fell, with an 8.9% decrease compared to 2024. The company’s electric ID.4 model saw a sales increase of about 31.4%, while the ID.Buzz electric van registered a rise of approximately 428.4%.

Volkswagen reported that tariffs imposed by the US on imported vehicles resulted in additional annual costs of up to €5 billion. These tariffs contributed to Volkswagen’s first quarterly operating loss since the COVID-19 pandemic, with a reported €1.3 billion loss in the third quarter of 2025, compared to a €2.8 billion profit in the same quarter of the previous year.

What the numbers show

  • Volkswagen’s US sales declined by 13% in 2025, totaling about 329,800 units
  • US SUV sales for Volkswagen dropped 8.9% in 2025
  • ID.4 electric vehicle sales rose 31.4%, and ID.Buzz sales increased 428.4% in 2025
  • Volkswagen reported a €1.3 billion operating loss in Q3 2025
  • US tariffs cost Volkswagen up to €5 billion annually

During the first half of 2025, Volkswagen’s US vehicle sales fell by about 16%, while the company’s global deliveries experienced a slight increase. The end of the $7,500 federal electric vehicle tax credit in September 2025 was cited as a factor influencing demand for Volkswagen’s electric models in the US market.

Volkswagen decided to halt exports of its electric ID.Buzz van to the US in 2026, citing weak sales and the expiration of federal electric vehicle incentives. This move reflected the company’s response to changing market conditions and incentive structures in the US.

According to company statements, Volkswagen’s chief financial officer said that US tariffs and restructuring expenses, including delays in electric vehicle programs, were affecting the company’s financial results and required increased cost-cutting measures. The company identified these factors as key contributors to its recent performance in the US market.

Industry reaction

Volkswagen’s CFO stated in company communications that the combined impact of tariffs and restructuring costs, along with delays in electric vehicle initiatives, necessitated accelerated cost reduction efforts.

The company confirmed that the expiration of federal incentives and lower demand for certain electric models influenced its decision to stop exporting the ID.Buzz van to the US market in 2026.

* This article is based on publicly available information at the time of writing.

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