Volkswagen cut its annual operating return on sales forecast to 1% on Monday — down from a prior range of 4% to 5.5% — and was simultaneously removed from the Euro Stoxx 50 blue-chip index, replaced by Nokia as the German automaker's shares approach their lowest level since 2010.
Volkswagen compounded a difficult year on Monday, cutting its annual operating return on sales forecast to 1% — down from a prior range of 4% to 5.5% — while simultaneously being ejected from Europe's benchmark blue-chip index, the Euro Stoxx 50.
The German automaker attributed the revised outlook to three factors: an impairment related to its substantial holding in Porsche, a "further deterioration" in the market environment — particularly in China — and rising restructuring expenses.
The company also pointed to a structural shift in consumer behavior. "An accelerated shift in demand in favor of battery-electric vehicles ... will lead to developments falling short of original expectations, especially for the Audi and Volkswagen Passenger Cars brands," Volkswagen said in a statement.
Shares fell 0.5% in mid-morning trading on Monday, extending Friday's 8.3% decline that followed the initial profit warning. Volkswagen's stock has shed 27.5% so far this year and is currently trading near its lowest level since 2010.
Deutsche Bank analysts offered a measured read of the situation, saying that while the latest warning "initially looks severe," it "significantly overstates the deterioration in the underlying business." The bank noted that the update includes 10 billion euros in one-off effects hitting earnings this year, but that underlying margins remain around 4% and cash generation remains intact.
The Euro Stoxx 50 exit, announced earlier this month as part of the index's annual rebalancing, took effect Monday. Volkswagen's replacement in the index is Finland's Nokia, which has benefited from AI-driven demand for data center connectivity infrastructure.
The index change underscores a broader reckoning for European automakers. Stellantis — the parent company of Jeep and Dodge — was removed from the same index a year ago amid its own restructuring challenges, signaling a sector-wide retreat from the continent's most visible corporate benchmark.
Volkswagen has been navigating that same terrain for some time. Earlier this month, the company received approval for the next phase of a sweeping restructuring plan that will eliminate 100,000 jobs as it works to address waning profits, pressure from Chinese competitors, tariff complications, and the ongoing transition to electric vehicles.
Nokia's inclusion, by contrast, reflects how capital and index weight are shifting toward companies tied to AI infrastructure — even legacy hardware firms, provided they hold a credible role in the build-out of data center networks.
Whether Volkswagen's restructuring efforts can stabilize its financials before further index exclusions or credit-rating actions materialize will be closely watched heading into the final quarter of 2026.
Sara Montes de Oca is the Editor in Chief of TechEchelon. Previously a correspondent and producer in Washington, D.C., covering business, finance, and politics.
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