The German automaker reportedly lacks 11 billion needed to fund next years operations and investments

Germany's largest carmaker, Volkswagen Group, is facing a potential financial crisis, with a multi-billion-euro cash-flow gap expected in 2026, Bild has reported, citing internal company figures.

The German auto giant will be about €11 billion short next year, leaving it unable to fund planned spending and investments, according to the newspaper. Volkswagen's half-year report for 2025 showed operating profit down 33% from a year earlier and a negative cash flow of €1.4 billion.

A slump in profits, weak business in China and competition from Chinese brands, as well as the tariffs imposed by US President Donald Trump have been blamed for the company's financial woes.

"Cuts are now being made practically everywhere - in marketing, sales, and some investments," one source told the newspaper. Several holdings may have to be sold to raise "a portion of the billions needed" for the development of new models and advanced technologies, Bild added. Senior managers described the situation as "particularly fatal" during the transition from combustion engines to electric vehicles.

Germany's car industry is facing one of its toughest periods in decades amid mounting competition from China. Volkswagen, BMW, and Mercedes-Benz all reported weaker deliveries in 2025, as demand in the Asian country - their biggest market - slumped while local EV makers such as BYD gained ground.

German automakers are also under pressure from US trade measures. Washington's 25% tariffs on European-built cars have hurt sales, and although an EU-US deal announced in August lowered the maximum rate to 15%, ongoing uncertainty continues to weigh on export and investment plans.

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Volkswagen, meanwhile, has unveiled major leadership changes aimed at restoring stability. CEO Oliver Blume will give up his dual post as head of both Volkswagen Group and Porsche AG, with former McLaren chief Michael Leiters to take over at Porsche on January 1, 2026. Blume will stay on as Volkswagen's chief executive, focusing on a broad restructuring and turnaround effort through 2030.

(RT.com)