Volkswagen’s future is at risk without further cost-cuts, the ailing German auto giant warned Thursday after profits plunged more than feared as headwinds mount.

The carmaker is struggling with Chinese competition, US tariffs and patchy demand for electric vehicles, and already has plans to axe 50,000 jobs across all its brands in Germany by 2030.

From January to March, the group’s net profit slid 28 percent to 1.56 billion euros ($1.8 billion) and revenues dropped to 76 billion euros, worse than analyst forecasts.

“The cost reductions planned so far are not enough,” said VW chief financial officer Arno Antlitz. 

“We need to fundamentally change our business model and achieve structural, sustainable improvements — in all areas and at all levels. If we fail to do that, we will jeopardise our future.”

VW, whose 10 brands range from Audio to Seat and Skoda, would have to adjust its capacity and “work on further optimising costs at our plants,” he said. 

Chinese automakers were not just competing on their home turf but also gaining market share in Europe, he warned. 

Carmakers like BYD have emerged as fierce rivals to Volkswagen in China, traditionally a key source of profits for the German manufacturer, particularly when it comes to EVs. 

Antlitz also said that US President Donald Trump’s tariffs, introduced a year ago, were burdening the group with an extra four billion euros in costs annually. 

Volkswagen delivered just over two million vehicles in the first quarter, down four percent from a year earlier. 

Overall deliveries slid 15 percent in China, with deliveries of EVs down 64 percent. Deliveries were down 13 percent in North America.

The group is forecasting sales to grow between zero and three percent in 2026, and for its core profit margin to come in between four and 5.5 percent. 

Possible impacts of the war in the Middle East were not included in the forecasts, as they cannot be reliably assessed, Volkswagen said. 

The woes of Volkswagen, one of Germany’s best known companies, reflect a broader malaise in Europe’s biggest economy, particularly among its traditional manufacturers.

The company’s annual profits slid to their lowest level in almost a decade in 2025. 

On Thursday CEO Oliver Blume said VW needed to align its strategy to a new world that was “undergoing fundamental change”.

“Wars, geopolitical tensions, trade barriers, tighter regulation, and intense competition are creating headwinds,” he said. 

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