Volkswagen's Shares Tumble to New Low as €5 Billion Tariff Bill Joins 50,000 Job Cuts

Volkswagen preference shares fell to a 52-week low of €79.02 amid skepticism over turnaround plan, €5B annual tariff hit, 22% China sales drop, and 50,000 job cuts by 2030.

Volkswagen’s preference shares slumped to a 52-week low of €79.02 on Friday, closing at €80.54 after a 4.66% daily decline. The drop was partly mechanical: a €5.26 per-share dividend deduction knocked the stock lower, but underlying selling pressure suggests investors remain deeply skeptical of the group’s turnaround plan.

The fresh low comes just days after the annual general meeting, where CEO Oliver Blume doubled down on the most radical cost-cutting drive in VW’s history. “The old business model no longer works,” he told shareholders, calling the current restructuring a “historical turning point.”

Tariffs, China, and a Shrinking Production Footprint

The headwinds piling up are formidable. US import tariffs are expected to cost Volkswagen roughly €5 billion annually, with Audi — which lacks its own American production — hit particularly hard. In China, the group’s sales collapsed 22% in May 2026 compared with the same month last year, and management sees no quick recovery.

In response, Volkswagen plans to slash global production capacity by one million vehicles — half in Europe, half in China. The job cuts are even more sweeping: 50,000 positions are slated to disappear by 2030, with 19,000 gone in Germany alone by the end of 2026. Over 28,000 departures have already been agreed, mostly through early retirement and severance packages.

The ultimate target remains an operating return on sales of 8% to 10% by 2030 — a level the company hasn’t consistently hit in recent years.

Technical Picture: Oversold but Still Under Pressure

The stock’s decline has been relentless. Since the start of the year, VW preference shares have lost roughly 24%. The relative strength index stands at 29, deep in oversold territory, but the 200-day moving average of €95.12 is more than 15% above the current price — a stark reminder of the underlying downtrend.

Analysts see medium-term upside of around 30% from these levels, but that depends entirely on execution. The market’s first real test will come later this year, when initial sales figures for the new model generation based on the MEB+ architecture are due.

A Spark of Hope: The MEBeco Electric Drive

Amid the gloom, Volkswagen is pressing ahead with its electric vehicle strategy. On June 18, Audi Hungaria in Gy?r began series production of the new MEBeco electric drive. For the first time, the Hungarian plant is manufacturing battery packs, rotors, and power electronics — including the associated software — in-house.

The MEBeco, built on the upgraded MEB+ platform, will form the backbone of the “Electric Urban Car Family.” The Cupra Raval is the first model to receive the new drive, which VW hopes will significantly reduce the cost base for entry-level EVs — and finally give it a competitive edge against Chinese rivals.

Whether the restructuring delivers the promised results will become clearer with the half-year figures. For now, Blume’s credibility rests on turning a deeply ambitious overhaul into tangible numbers.