Introduction

The economy serves as the bedrock of politics, while politics acts as both the sword and shield safeguarding the economy. Major decisions made by multinational corporations often represent extensions of international political dynamics.

Volkswagen CEO Oliver Blume stated in an interview with Frankfurt-based media that the automotive giant plans to invest €160 billion (approximately RMB 1.3 trillion) by 2030. This investment figure is slightly more conservative compared to previous years' projections.

According to Reuters' tally of Volkswagen's prior investment arrangements, the company had earmarked €165 billion (approximately RMB 1.36 trillion) for the period from 2025 to 2029, and €180 billion (approximately RMB 1.48 trillion) for 2024 to 2028. Notably, 2024 was set to be the peak investment year for the group.

The investment budget planned through 2030 not only shows a contraction in the overall budget size compared to previous years but also entails adjustments in investment directions.

Blume disclosed in the interview that the new round of investments will primarily focus on Germany and the broader European market. Key areas of investment include electrification, research and development of new technologies, as well as the construction of supply chains and infrastructure.

Faced with a profound transformation in the global automotive industry landscape, Volkswagen is adopting a more focused strategic approach by directing its resources towards Europe.

Blume also emphasized that the investment strategy for the 2026-2030 period will prioritize "addressing geopolitical volatility" and "enhancing regional technological moats." The plans encompass the establishment of self-built battery production capacity in Europe, the development of future-oriented vehicle software systems, and the adaptive transformation of traditional fuel vehicle production lines in Germany to align with the new four modernizations.

The economy serves as the bedrock of politics, while politics acts as both the sword and shield safeguarding the economy. Major decisions made by multinational corporations often represent extensions of international political dynamics.

European automotive analysts have pointed out that Volkswagen is gradually moving closer to Tesla's vertically integrated model. By strengthening its control over the European supply chain, Volkswagen aims to ensure local supply realization, reduce external dependencies, and mitigate geopolitical risks.

China and the U.S. have long been core markets that Volkswagen heavily relies on. However, due to tariff shocks from the Trump administration and the rise of Chinese domestic brands, profit margins in these two core markets are now under unprecedented pressure.

In the first three quarters of 2025, although Volkswagen Group's operating revenue remained flat year-on-year and its electrification efforts accelerated, its operating profit was only €5.408 billion (approximately RMB 44.5 billion). This represents a significant 58% decline from the €12.812 billion (approximately RMB 125.5 billion) recorded in the same period last year.

The "halving" of profits was primarily influenced by factors such as impairment in the Porsche business and rising U.S. tariff costs.

According to statistics, in the first three quarters of this year, Volkswagen's tariff expenditures in the U.S. market reached as high as €2.1 billion (approximately RMB 17.3 billion). The annual impact is potentially expected to expand to €5 billion (approximately RMB 41.2 billion).

With mounting pressures in the Chinese and U.S. markets, Europe has emerged as Volkswagen's growth pillar. From January to September this year, Volkswagen Group delivered a cumulative 3.089 million new vehicles in the European region, marking a 4.8% year-on-year increase. Sales in the German market also began to rebound, with cumulative deliveries of 875,000 vehicles, up nearly 5% year-on-year.

Volkswagen Group has come to realize that, under the new global competitive landscape that emphasizes both efficiency and security, it needs to rethink its supply chain strategy to adapt to unpredictable market changes.

Focusing resource allocation on Europe in the coming years is not only a large-scale capital deployment but also a strategic move made by Volkswagen to build long-term resilience in the face of geo-economic changes.

As early as a month ago, Volkswagen had already anticipated that, considering factors such as U.S. tariff hikes and China's market being in a period of transformation and adjustment, the group's investment losses next year could reach as high as €11 billion (approximately RMB 90.6 billion). This prompted the supervisory board to adopt a more cautious approach in investment decisions.

In addition to strategic adjustments at the investment level, Volkswagen is also working to circumvent various EU tariff restrictions.

According to a recent report by Automotive News Europe, an official communique from the European Commission disclosed that it will re-examine the import tariff policy for the pure electric vehicle model Cupra Tavascan produced by Volkswagen China's Hefei plant.

In early 2024, the EU imposed up to a 45% so-called "punitive tariff" on electric vehicles imported from China. This move raised the threshold for Chinese electric vehicles to enter Europe and triggered widespread shocks and chain reactions across the global supply chain.

It is reported that Volkswagen China's joint venture company and Spanish brand Seat jointly proposed setting quotas and minimum import prices for the pure electric vehicle model Cupra Tavascan produced in Hefei in exchange for anti-subsidy tax exemptions.

"If the proposal is accepted, anti-subsidy taxes will no longer be levied," a source familiar with the matter stated.

According to the joint proposal, once accepted, the Cupra Tavascan can bypass the EU's high tariff barriers on Chinese electric vehicles and enter the European market at a lower cost.

However, Volkswagen's quest for tariff exemptions must comply with a series of corresponding regulations, and the process may take "several months," with many uncertainties remaining during this period.

Editor-in-Charge: Du Yuxin Editor: Chen Xinnan

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