The EU and China have reached a deal to cut exports of hybrids and plug-in hybrids from China to Europe by half. Chinese brands have captured one-quarter of Europe's hybrid market.
VW is taking all the right steps to improve returns—capacity reductions in Europe, localization in China, tapping into the lucrative US pickup truck market, and maximizing the use of common platforms.
Bears
With many capital-intensive projects underway simultaneously during an environment of extreme competition and technological change, we are skeptical that management has the bandwidth to execute as guided.
Volkswagen is the second-largest automotive original equipment manufacturer by vehicle sales globally, selling 9 million vehicles in 2025. It has four vehicle segments: core (Volkswagen, Seat, Skoda, and VW commercial), progressive (Audi, Lamborghini, and Bentley), sports luxury (Porsche), and Traton commercial vehicles (Traton, Scania, Navistar, MAN, and VW truck and bus), which contribute 45%, 20%, 10%, and 13% to group revenue, respectively. It also has a vehicle software business (Cariad), batteries (PowerCo), power engineering production, and financial services.