VW's Preferred Shares Under Pressure as Audi's Guidance Cut Exposes the Cost of a Multi-Continent Push

VW slashes 2026 revenue guidance as Q2 profit drops 9.5%, China deliveries fall 36%, and boardroom fights over plant closures intensify.

The gap between Volkswagen's operational hustle and its stock market performance has rarely been wider. While the Wolfsburg group rolls out service campaigns in South Korea, opens pre-sales for a new China-bound sedan, and unveils camper van concepts in Düsseldorf, the preferred shares continue to drift near levels that suggest investors are looking straight past the product pipeline and focusing on the mounting financial strain.

That strain was laid bare in late July, when Audi slashed its 2026 revenue outlook by roughly €5 billion. The Ingolstadt subsidiary now expects sales of €58 billion to €63 billion, down from the range it had guided in April, and has trimmed its operating margin target to between 5 and 7 percent. The parent company followed suit on July 24, cutting its 2026 revenue guidance to a range of minus 3 percent to zero growth, having previously promised an expansion of up to 3 percent. The group's operating margin forecast of 4.0 to 5.5 percent was left untouched.

The half-year numbers behind that revision make for uncomfortable reading. Volkswagen's operating result for the first six months came in at €3.6 billion, a 4.5 percent improvement year-on-year, but the second quarter tells a far less flattering story. Operating profit fell to €3.5 billion, down 9.5 percent, while net profit after taxes tumbled 32.9 percent to €1.53 billion. Deliveries slipped 8.6 percent to 2.08 million vehicles, with China delivering the sharpest sting: just 424,300 units handed over, a 36 percent decline against the same period last year.

A Boardroom Battle Over Billions

The financial deterioration is colliding with an unresolved fight over the cost base. The supervisory board rejected a sweeping savings package on July 9, and according to the investigative outlet Correctiv, management is now weighing an extraordinary general meeting to force the plan through. The proposals could touch as many as 100,000 employees, with four plants — Hannover, Zwickau, Emden and Audi's Neckarsulm site — facing potential closure as their current models run out. The package is expected to return to the agenda in September, with works meetings slated for late August.

In the meantime, the group is monetizing assets. At the end of June, Volkswagen signed an exclusive agreement to sell 51 percent of its engine subsidiary Everllence to Bain Capital for around €7.4 billion, retaining a 49 percent stake for the medium term.

Product News Offers a Counterpoint

None of this has halted the product offensive. Volkswagen Group Korea kicked off its "EV Life Care" campaign on Wednesday, offering ID.4 and ID.5 owners service packages with up to 20 percent off wear parts for five years, plus a two-year or 150,000-kilometer warranty extension. The ID.4, which manages 424 kilometers of range in Korea, qualifies for a state subsidy of 4.32 million won; the ID.5, with 451 kilometers, receives 4.73 million won.

In China, Volkswagen and partner SAIC opened pre-sales on Tuesday for the ID. ERA 5S, the brand's first sedan equipped with the "Urban NOA" assistance system. The entry price: $17,100. It is a direct attempt to hold ground in a market where domestic EV makers are setting the pace and where, back in Germany, Chinese brands have already lifted their first-half market share to 3.8 percent from 2.2 percent a year earlier.

At the Caravan Salon in Düsseldorf, Volkswagen Commercial Vehicles is showing two world premieres: the ID. California Cruise study and an inflatable furniture concept called Stuff Bubble, whose kitchen module weighs under ten kilograms — a 60 percent weight saving over conventional setups. The combustion-powered California Beach remains available from €66,087 (TDI, 150 PS) or €66,402 (TSI, 204 PS), while the eHybrid 4Motion variant, with 245 PS and an electric range of 89 kilometers, starts at €78,243.

There are also signs of life in the order book. The Electric Urban Car Family, which includes the ID.Polo, has drawn more than 70,000 orders in the first half, and European EV orders rose 50 percent. Pre-sales for new full-hybrid versions of the Golf and T-Roc have begun in Germany, with the Golf Hybrid priced from €41,400.

Shares Remain in the Doldrums

The market, however, is not rewarding any of it. The preferred shares last changed hands at €74.54, roughly one percent below the previous close of €75.34 and 28.43 percent off their level at the start of the year. The distance to the December peak of €109.10 stands at just over 31 percent, while the stock sits about eight percent above its early-July low of €69.20. Against the 50-day moving average of €77.56, the shares are trading 2.86 percent lower.

Political headwinds are not helping. Politicians from the SPD and CSU are pushing to reform Germany's EV purchase subsidy, arguing the current scheme also benefits luxury vehicles; four adjustment levers are under discussion, though a single minister is blocking progress so far.

Analysts have responded with trimmed price targets. HSBC cut its objective for the preferred shares from €133 to €127 on July 28, keeping a "Buy" rating. A day earlier, another house lowered its target from €99 to €90, also maintaining a "Buy" stance.