German premium carmaker Audi announced on Monday that its net profit plummeted by 37.5 percent year on year in the first half of 2025.
According to its latest financial report, Audi's net profit fell to 1.35 billion euros. The company primarily attributed the sharp decline to significantly higher costs stemming from U.S. auto tariffs that came into effect in early April.
Juergen Rittersberger, Audi's Chief Financial Officer, revealed that the tariffs alone have added around 600 million euros in extra expenses. Since Audi does not operate a manufacturing plant in the United States, it has had to shoulder the full burden of the tariffs, rather than passing the cost on to consumers.
Audi's challenges underscore the broader headwinds facing Germany's export-oriented automotive sector, which has been rocked by escalating trade tensions. As one of the world's largest auto exporters, Germany has been particularly vulnerable since Washington implemented an additional 25-percent tariff on European Union (EU)-manufactured vehicles.
Data from the German Federal Statistical Office shows that German car exports to the United States slumped by 23.5 percent year on year in April and May, despite a 14.7-percent surge in the first quarter. The early-year boost was largely due to front-loaded orders from American buyers rushing to avoid the anticipated tariff hike.
The United States remains Germany's largest automotive trading partner. Last year, the country's top three automakers - Volkswagen, Mercedes-Benz, and BMW - accounted for around 73 percent of all EU car exports to the U.S.
While a weekend agreement between the United States and the European Union capped auto tariffs at 15 percent, a reduction from previously planned punitive levels, the German auto industry remains cautious.
Hildegard Mueller, president of the German Association of the Automotive Industry (VDA), warned on Monday that the revised tariff rate could still cost German carmakers several billion euros annually, exacerbating financial strain at a time of fundamental transformation for the industry.
The VDA has consistently opposed Washington's tariff hikes, warning they would undermine EU exports, disrupt global supply chains, and increase costs for American consumers.
Audi profit slumps as U.S. tariffs squeeze German auto giants
