Porsche SE, the holding company controlling Volkswagen, has slashed the book value of its VW stake by €3 billion, an impairment that underscores how sharply the automaker's fortunes have eroded in the eyes of its own controlling family.

The holding, which owns 31.9 percent of Volkswagen's voting rights and 12.5 percent of Porsche AG, swung to a group loss of €2.2 billion in the first half of the year, reversing a €0.3 billion profit from the same period last year. A further €0.2 billion writedown on its Porsche AG stake added to the damage, while adjusted earnings dropped 14.5 percent to €949 million. Net profit for the group fell by nearly a third over six months.

The scale of Volkswagen's restructuring reflects the pressure. The company has already cut 50,000 jobs, with another 50,000 positions and four German plant closures under consideration — proposals the supervisory board has yet to approve. In Zwickau, staff reductions continue as EV production runs below capacity, and cost-cutting efforts have struggled to boost the core brand's thin margins.

Porsche AG, by contrast, posted a 34 percent jump in operating profit to €1.3 billion despite a 5.1 percent revenue decline to €17.2 billion. Deliveries fell 16.5 percent to 122,306 vehicles, and the EV share of sales dropped from 23.5 to 19.4 percent, yet improved cost discipline lifted profitability — a contrast to Volkswagen's own struggles.

China remains the biggest headache. The overall passenger-car market there shrank 20 percent in the first half, while VW's combustion sales plunged 26.7 percent even as it held a 22.6 percent share of that segment. In EVs, the company holds only about 5 percent of a market where new-energy vehicles make up 54 percent of sales. BEV deliveries fell 64 percent in the first quarter, and total China deliveries dropped 36.6 percent in the second. VW is responding with a partnership with Xpeng on the ID. UNYX 08 and roughly 20 locally developed models planned for 2026.

The broader industry is also under strain: among the 15 largest non-Chinese automakers, average per-vehicle earnings fell 15.8 percent in the first half, according to the CAM institute, which called the trend an "alarm signal."

Despite the turmoil, Volkswagen is pushing into North America with a new pickup planned for its Chattanooga, Tennessee plant, possibly in partnership with Ford. Kjell Gruner is stepping down as North America chief, replaced by Audi's Marco Schubert.

VW's preferred shares closed at €74.96 on Tuesday, down 0.43 percent, leaving them 28.03 percent lower year-to-date and 31.29 percent below their 52-week high.

Source: AD HOC NEWS

Before this, we covered: Porsche previews Ferrari-rivalling supercar