VW Surges: 2025 Cash Flow Beats All Expectations

Shares of Volkswagen experienced a significant surge, leading Germany's blue-chip DAX index on Thursday, January 22, 2026. This market performance followed the announcement of better-than-expected net cash flow for the automotive division in 2025.

Volkswagen reported that its net cash flow for the year reached approximately 6 billion euros. This figure represents a 1 billion euro increase from the previous fiscal year and significantly outperformed the company's own projection of around zero. Analysts at Jefferies noted the surprising magnitude of this upside.

Further contributing to positive industry sentiment was the de-escalation of trade tensions, as U.S. President Donald Trump appeared to back away from threats of tariffs on European allies. This eased immediate concerns regarding punitive trade measures.

However, Volkswagen also shared less optimistic projections for the near future. During a recent investor call, the company indicated that it expects a tense pricing environment and a decline in profits from its Chinese joint venture in 2026, with recovery anticipated in 2027.

Other German automakers, including BMW, Mercedes, and Porsche, also saw gains, contributing to a broader rise in the pan-European automobiles and parts index. Factors such as federal electric vehicle subsidies in Germany and a technical rebound on relatively low valuations may also be supporting the sector.