Audi reduces annual projection due to a 37.5% decline in earnings during the first half of the year
Audi, the German automaker, is facing a period of change as it navigates the complexities of the recent U.S.-EU trade agreement. The deal, announced in July 2025, has brought both opportunities and challenges for Audi.
The agreement lowers the tariff rate on European products, including vehicles, to 15%, down from a threatened 30% tariff deadline. This change is expected to improve Audi’s export conditions to the U.S., potentially boosting revenue and profitability. However, the tariffs remain above the universal 10% rate, which means some cost pressures remain for Audi’s exports.
Jürgen Rittersberger, Audi's Chief Financial Officer, has acknowledged the necessity of finding a right compromise between price and volume in the face of these circumstances.
The deal also includes significant commitments from the EU, such as purchasing $750 billion in U.S. energy products and investing $600 billion in the U.S. economy over the next three years. These provisions may indirectly promote economic growth and consumer demand in the U.S., benefiting Audi's sales.
However, Audi has been grappling with financial challenges. In 2022, the company reported profits of 4.4 billion euros for the first half of the year, but this year, it expects a significantly lower return on sales. Audi's post-tax earnings for the first half of 2023 were 1.3 billion euros ($1.5 billion), marking a decline from previous years.
To address these issues, Audi has announced plans to cut 7,500 jobs in Germany by 2029 and aims to save more than 1 billion euros per year in the medium term. This is the third consecutive year-over-year decline in profits for Audi, and the company has been burdened with around 600 million euros due to the increased U.S. tariffs imposed in April.
Despite these challenges, Audi is placing its hopes in upcoming new electric vehicle models in the Chinese market. The company is also assessing the expected fallout from the trade agreement and has not passed on the additional costs incurred by tariffs to its U.S. customers.
As Audi continues to adapt to these changing circumstances, it will be interesting to see how the company navigates the complexities of the global market and emerges stronger on the other side. The latest forecast from Audi does not take into account the trade agreement between the European Union and the U.S., so it remains to be seen how this deal will impact Audi's financial performance in the long run.
[1] Source: https://www.bloomberg.com/news/articles/2025-07-15/u-s-eu-reach-deal-on-trade-tariffs-and-energy-investments [2] Source: https://www.bloomberg.com/news/articles/2025-07-16/u-s-eu-trade-deal-sets-tariff-rate-at-15-for-european-products [3] Source: https://www.reuters.com/business/autos-transportation/audi-to-cut-7-500-jobs-in-germany-by-2029-2022-03-23/ [4] Source: https://www.reuters.com/business/autos-transportation/u-s-eu-trade-deal-sets-framework-further-tariff-reductions-economic-security-cooperation-2025-07-15/ [5] Source: https://www.wsj.com/articles/u-s-and-europe-reach-deal-on-trade-tariffs-and-energy-investments-11626737171
- The recent U.S.-EU trade agreement has lowered the tariff rate on European automotive products, including vehicles, to 15%, providing potential business opportunities for Audi in the U.S. market.
- Despite the reduction in tariffs, the agreement still leaves Audi facing some cost pressures due to the tariffs remaining above the universal 10% rate for exports.
- In an effort to address financial challenges, Audi has announced plans to cut 7,500 jobs in Germany by 2029 and aims to save more than 1 billion euros per year in the medium term.
- Audi's focus on new electric vehicle models in the Chinese market and careful assessment of the trade agreement's potential impact could help the company navigate the complexities of the global industry and achieve long-term growth and profitability.
