German-based Volkswagen Group reported on Monday that it delivered 2,048,900 vehicles worldwide in the first quarter of 2026.
The figures represent a 4.0% decline from the same period a year earlier, with the United States and China leading losses, which were partially offset by a strong performance in Europe.
Intensifying Chinese competition from BYD, Geely, and Xiaomi, combined with US tariffs imposed a year ago and the discontinued $7,500 federal EV tax credit, continued to weigh on volumes.
European deliveries rose 4.7% year over year to 983,800 vehicles, with the highest increase in Central and Eastern Europe, where registrations expanded by 7.6%.
Registrations climbed on the back of new model launches across the group’s brands, mainly the more affordable Škoda.
“The first quarter of 2026 was once again characterized by very challenging economic and geopolitical conditions,” said Marco Schubert, Member of the Group’s Extended Executive Committee for Sales.
Schubert added that the group “largely maintained its global market share” and expects “further positive momentum from key new models such as the Electric Urban Car Family in Europe and new locally developed electric models in China.”
BEV Sales
The German legacy automaker delivered 200,000 battery electric vehicles (BEV) in the first quarter, representing 9.8% of overall VW Group sales.
It marked its weakest quarter since mid-2024.
Fully electric deliveries in Europe rose 12% year-over-year in the first quarter, a result that stood in sharp contrast to every other region — where the group’s BEV deliveries fell by between 20% and 80%.
Among the group’s passenger car brands, Škoda was the only one to post BEV growth in the first quarter, with deliveries surging 91.9% year-over-year to 51,800 units.
Every other brand registered declines.
Seat/Cupra, the group’s more affordable brand following Škoda, posted a slight decline of 4.4%.
The core Volkswagen brand delivered 62,400 fully electric passenger cars between January and March — a 34.4% drop.
Audi registered a 9.4% decline, while Porsche fell 34.2%.
Porsche‘s performance mirrors broader strategic problems at the Stuttgart-based sports car maker, which reported a 15% global delivery decline.
The luxury brand’s 2025 operating profit collapsed to €413 million from €5.64 billion the year before, hit by roughly €3.9 billion in one-off charges tied to a strategic reset that includes abandoning a planned all-electric platform and pivoting back toward combustion and plug-in hybrid powertrains.
The figures suggest that the group’s more affordable, mass-market BEVs have held up better than its premium nameplates.
The Škoda Elroq was the group’s best-selling BEV in the quarter with 29,700 units.
It was followed by the Volkswagen ID.4/ID.5 (25,000), the Škoda Enyaq including the coupé version (22,100), and the Volkswagen ID.3 (19,600).
US Sales Plunge
North American deliveries totaled 205,500 vehicles, down 13.3% from a strong prior-year period.
The decline was driven primarily by the United States, where deliveries fell 20.5% amid a challenging environment shaped by tariffs and regulatory changes.
BEV deliveries in the US dropped 80%, reflecting both the expiration of federal purchase incentives and the impact of increased tariffs in effect since April 2025.
The quarterly figures landed just days after Volkswagen confirmed it will end production of the ID.4 at its Chattanooga, Tennessee plant in mid-April.
The facility will shift to the second-generation Atlas SUV, with the 2027 model year starting production this summer.
Volkswagen said existing ID.4 inventory will support customer demand into 2027 and that a future version of the model is planned for North America, without providing a timeline.
“The EV market continues to challenge the industry, requiring measured decisions throughout the last few years to navigate this unpredictability,” Volkswagen said in a statement.
Volkswagen Group of America President and CEO Kjell Gruner framed the move as “a strategic shift” that positions the Chattanooga plant “for long-term success and future product opportunities.”
China Decline Continues
Deliveries in the Asia-Pacific region fell 14.1% year-over-year to 618,900 units, weighed down by a significantly declining Chinese market.
Volkswagen Group deliveries in China dropped 14.8%, though the group recorded a slight market share gain in the quarter.
BEV performance in China was sharply weaker ahead of the launch of new locally developed electric models, with deliveries falling 64% following the expiration of government subsidy programs.
The delivery figures show the worst result in the past four years.
Only 1.7% of the group’s sales in China during the past quarter were fully electric.
The quarter closed just as the group began rolling out the first of those locally developed models.
In March, Volkswagen Anhui started mass production of the ID. Unyx 08, a mid-size electric SUV co-developed with Chinese EV maker XPeng and the first output of a partnership sealed in 2023 — when Volkswagen acquired a 4.99% stake in XPeng for around $700 million.
The ID. Unyx 08 is scheduled to reach Chinese buyers in the first half of 2026, with a second co-developed model expected later this year.
Volkswagen plans to launch more than 20 locally developed new energy vehicles in China in 2026 and a total of 50 by 2030, with Volkswagen Group China chairman and CEO Ralf Brandstätter describing the cadence as “China speed.”
The Chinese market’s difficulties have shaped the group’s broader strategic thinking.
In an interview with Bild am Sonntag last month, VW Group‘s CEO Oliver Blume said German carmakers could learn from China’s disciplined industrial planning.
“The Chinese proceed in a very planned way and have clear priorities — it is structured in an optimal way,” Blume told the newspaper, pointing to “a high level of discipline and willingness to execute” among Chinese players.
Blume said Volkswagen faces “over 150 competitors and strong innovation dynamics” in the Chinese market and reiterated that the group plans to cut 50,000 jobs in Germany by 2030 as part of its restructuring.
The CEO has applied “clear manufacturing cost targets” to all group plants in Germany, Europe and China to avoid costly overcapacity.
The collapse in Chinese BEV volumes comes as the group navigates a broader trade standoff between Brussels and Beijing.
The European Union imposed countervailing duties of up to 35.3% on Chinese-built electric vehicles in late 2024, on top of the bloc’s standard 10% import tariff, following an anti-subsidy investigation.
In February, Volkswagen Anhui became the first manufacturer to secure an exemption from those duties for its Cupra Tavascan under the EU’s new price undertaking framework.
The Tavascan — a European-designed coupe SUV built exclusively in Anhui and exported to the EU — had previously faced an additional 20.7% countervailing duty on top of the standard 10% tariff.
Under the agreement, VW Anhui committed to a minimum import price, an annual volume cap and a pledge not to export any other BEVs or plug-in hybrids to the EU under the same terms.
