German Handelsblatt: Interview: “Act with self-confidence” – VW boss Blume counters Trump’s tariff course012265

Oliver Blume: The VW boss is critical of the US President’s customs policy. Photo: Dpa, Bloomberg, AFP [M]

Davos. Many CEOs kept their distance in Davos: too sensitive, too volatile, too political. Oliver Blume does the opposite. In the middle of the World Economic Forum, the VW CEO faces questions about the new world order – and draws direct consequences for the company.

In response to US President Donald Trump’s appearance, Blume called for Europe to take a self-confident line in an interview with Handelsblatt. The EU responded “correctly” to the tariff threats from Washington, he says: “Europe has many strengths and can act with self-confidence. That’s why clear positions are important.”

At the same time, he ties new US investments to relief: “If the burden of tariffs remains unchanged, a large additional investment cannot be financed.” This also applies to a possible Audi plant in the USA.

Read the entire interview with Oliver Blume here:

Mr. Blume, you followed Donald Trump’s speech live in Davos. Are you relieved or worried? What was positive in the end was that the US President took the idea of additional tariffs off the table. Stable, reliable framework conditions are crucial for the industry. That’s why we continue to rely on dialogue and international cooperation – on both sides of the Atlantic.

There is talk of a historic week in Davos. Is the old world order currently dissolving? We move in a world full of social, political, technological and economic upheavals. The world order is under tension. Big players like the USA, Europe and China have a lot of responsibility right now. This also applies to many emerging countries in the global south. All nations must do their part to set the right course for the future. For peace, stability and prosperity.

Vita Oliver Blume

Oliver Blume is CEO of Volkswagen AG. The 57-year-old previously led the Porsche sports car brand for several years and ran the company parallel to VW for three years. Blume is considered an advocate of greater regionalization of the group and is pushing forward the conversion towards electromobility, software and new platforms.

Volkswagen is Europe’s largest car company with brands such as VW, Audi, Porsche, Skoda and Seat/Cupra. The group is in the middle of a comprehensive restructuring and savings program to reduce costs and increase profitability. At the same time, Volkswagen is investing around 160 billion euros worldwide in new technologies and models over the next five years.

Do you still have hope that the USA will succeed? Donald Trump is currently staging the big ego show again. Yes, I have that. We must rely on cooperation, not confrontation. International cooperation has historically ensured growth and better living conditions around the world. There will be no way around this model of coexistence in the future either. When I became CEO of Volkswagen Group three years ago, the world was different. In the USA, low tariffs, no IRA program yet, consistent focus on decarbonization. China was closed due to corona, with export business from Europe still flourishing. The European market itself was in a post-Corona euphoria with high order backlogs and prices. Today the situation has become significantly more complex and demanding.

An international CEO told us with regard to the USA: “We are experiencing a brutalization of morals.” Do you see that too? The political tone has changed, but at the same time we continue to work very constructively with our American partners. All agreements with us have been adhered to so far. We have close ties with the United States. In our operations, with our trading partners, in our software joint venture with Rivian in California or in building our own new brand Scout in South Carolina. We can rely 100 percent on our US partners.

Donald Trump: The US President primarily relies on tariffs as a trade policy tool. Photo: Getty Images

The EU had since announced countermeasures in response to Trump’s tariff threats. Was that right or too hard? We have an EU internal market with around 450 million people. Europe has many strengths and can act with confidence. That’s why clear positions are important. As a global group, we are committed to open markets. Free trade has brought growth and prosperity to the world. But it has to be fair, binding and reliable.

How much are the US tariffs affecting the VW Group? In the first nine months of 2025, tariff effects impacted the consolidated result by around 2.1 billion euros. This is despite the fact that the increased tariffs have only been in effect since April. You can roughly calculate what further burdens would mean.

Which brand is hit the hardest? Take Porsche as an example: In the USA, the largest single market, we had a record year in sales in 2025 – but because of the tariffs we hardly made any money. There are other brands that are severely affected. At the same time, we in the Volkswagen Group have a forward strategy for our US business and see clear growth opportunities.

More about Volkswagen

The goal used to be a ten percent market share in the USA. Today it is around four percent. Is the goal still realistic? Ten percent was an old goal. In today’s situation we have to proceed step by step. As the Volkswagen Group, we are an integral part of US society and employ thousands of people there. Volkswagen and Audi have potential. With the new Scout brand, we are starting something new in the automotive segment with the highest volume and sales in the USA – but development also depends heavily on the general conditions.

You say framework conditions – but you mean tariffs. Does that mean: Without relief there, there will be no new Audi factory in the USA? We had some discussions with the government in Washington. The President is informed about our investment plans and strategy. However, our discussions so far with the Commerce Secretary and the President have not yet produced the results we need to make a further decision.

This means that if the tariff burden remains unchanged, a large additional investment cannot be financed. What we need are short-term cost relief and long-term reliable framework conditions.

What would have to happen for Audi to build in the USA? Simply put, it’s about economic logic: Anyone who invests, creates jobs and creates added value must also have advantages on the cost side. We remain open to solutions that benefit both sides. Our approach is a win-win concept. The discussions that I personally had were always fair and constructive – but we have not yet come to a solution.

What financial scale are we talking about for an Audi US plant? The financial scale depends crucially on which set-up we choose. That means in which capacities and depth of added value we invest.

Where could Audi ultimately produce – in Chattanooga, at Scout in South Carolina or on a greenfield site? There are different options. Among other things, we have a large property at Scout in South Carolina, where the collaboration with local partners is excellent. Other states have also shown interest. We make a decision when the general conditions are clear.

VW plant in Chattanooga: Is there room for Audi production here? Photo: Bloomberg/Getty Images

They are investing enormous sums anyway: 160 billion euros worldwide for the next five years. How do you manage your budget in this world situation? And are you taking money out of America? We invest primarily where our profit pools are. Europe remains our strongest market. For example, in Spain we are currently investing in a complete value chain around batteries and new models – our new compact electric family with starting prices starting at 25,000 euros with models from VW, Cupra and Skoda. In total we are talking about around 10 billion euros.

And in China? In China, we try to finance future investments together with our partners using cash flow. We are gradually reducing the total investment amount across the group: We promised the capital market this three years ago and are continually making good progress towards this.

It sounds like your next five-year plan will be even narrower. Above all, I would say: He is becoming more focused. Our goal is to reduce our investments as planned. Our level of investment is high because we invest in different drives, batteries, software and growth areas such as Scout at the same time – this also has a negative impact on returns. This makes spending discipline all the more important in all areas.

China is still a problem: the company is at a 14-year low. How do you navigate this? In China, we have comprehensively repositioned ourselves operationally and strategically: product strategy, local development, technologies, partnerships. We had an acute need for action in the new competitive environment and have radically changed our business model in the most dynamic market in the world over the last three years and have already achieved a lot in a short space of time. The first products developed entirely in China are now coming onto the market. In 2026, it will be crucial how quickly we can gain a foothold in the rapidly growing NEV segment (editor’s note: New Energy Vehicles, includes hybrid and electric vehicles). We are technologically and price competitive. However, due to the high intensity of Chinese competition, it will not be a sure-fire success – we are optimistic and have every chance in our hands.

The opportunities for Porsche are manageable; the brand is losing massive volume in China. Will it continue to decline? The luxury market in China has collapsed by over 80 percent in a short period of time. This particularly affects Porsche. A newly designed luxury tax complicates the situation. As a result, Porsche lost around 25 percent of its total sales. We do not expect any changes in the foreseeable future.

That doesn’t sound very encouraging. The export model with high margins that has been successful for decades no longer works in this form. It is therefore important to make the Porsche China business economically viable at a significantly lower level: adapt the organization, reduce production capacities, reduce the dealer network and increase exclusivity. In a next step, Porsche could possibly examine whether more value creation in China would make sense – but there is no decision on this.

Are you currently announcing a Porsche “made in China”? No. No decision has been made on this matter. As the Volkswagen Group, we invest a lot in development and production in China – but that would be a very big step for Porsche. Now the sports car brand is concerned with making the business more profitable.

Does Europe have to become more robust towards China – for example by forcing joint ventures? We in Europe need to look at ourselves and think about what we can do better to support our industry. No coercion, no protectionism. It’s about protecting our interests. Europe has great opportunities.

Porsche exports to China: The situation on the Chinese market has deteriorated significantly for the sports car brand. Photo: picture alliance/dpa

Where do you see the biggest ones? In a professional industrial policy, less regulation and trade agreements. Targeted funding in key technologies is important. Companies currently have little advantage in developing and producing in Europe. But getting involved in Europe has to be worth it. Fair for everyone who creates added value and jobs in Europe.

What are you specifically asking for? It’s about maintaining and expanding added value in Europe – also in the future. That’s why I think it’s right to say in terms of industrial policy: A European footprint must have a value.

You talk about local content specifications. Exactly. Anyone who trades in Europe should be obliged to produce a certain proportion of the added value here. It’s about a level playing field. If a company from outside Europe builds factories here, sets up a supply network and integrates European suppliers, then it should be treated in the same way as a European company. We know “Buy American” and also “made in China”. It is therefore right to discuss how production and investment in Europe can be secured through “made in Europe”.

How can you particularly see this imbalance? Take the battery cells. Everyone says: We need battery technologies in Europe to become more independent. At the same time, we currently receive hardly any funding for this. The initial investments are immense. Canada is an example of how these technologies are professionally managed in the country. If we in Europe want such future technologies, then we have to support them. Another aspect is the strong regulation of European companies. A significant disadvantage in global competition. An additional imbalance: Those who export to Europe sometimes pay lower tariffs. When we export, we pay much higher tariffs.

You mean in the USA? Yes. European automakers pay a 15 percent tariff on exports to the United States. We currently still have a 10 percent import duty on cars from the USA. If the European Parliament reduces the European import tariff for US goods to zero percent, they will pay nothing more. This deal is asymmetrical and distorts competition.

How do you explain this complex situation to the owner families? According to our information, they are increasingly skeptical about your course… The owner families and the entire supervisory board are well versed in the issues and are well informed. We regularly have a trusting dialogue – most recently this week. We discussed how future prospects are becoming increasingly complex given the current world situation and what that means for our business model and our decisions. That’s why we have to think more in scenarios. I feel great support from the Supervisory Board, personally and for the course we have chosen.