Volkswagen’s Dividend Day Looms as Shares Hit New Low and CEO Declares Model “Failed”

Volkswagen’s annual shareholder meeting this past week laid bare the depth of the crisis gripping Europe’s largest automaker. Chief Executive Oliver Blume bluntly declared the company’s long-standing business model — engineering in Germany, production in Europe for global markets — no longer viable. Internally, the alarm is even louder: six of nine board members view the company’s very existence as acutely threatened, according to a survey presented to the supervisory board in April. The assessment, described by one executive as “fatal,” has sent shockwaves through the stock.

The market response was swift. Shares touched a fresh 52-week low of €79.02 on Friday before closing at €80.54, a single-session loss of roughly 4.7%. Since the start of 2025, the stock has shed about a quarter of its value. Some of the recent weakness is technical — the ex-dividend adjustment following the AGM — but the fundamental picture is deteriorating fast. First-quarter net profit slumped 28.4% to €1.56 billion, and operating margins have fallen well behind rivals BMW and Mercedes-Benz, according to J.P. Morgan, which maintains a hold rating.

A massive cost-cutting drive is already underway. Volkswagen plans to eliminate 19,000 positions by year-end and 35,000 at the core brand by 2030, with another 15,000 jobs under review at Porsche and Audi — bringing the group total to 50,000. The arithmetic behind the cuts is stark: hourly labour costs in Germany exceed €40, compared with roughly €30 in the United States and below €10 in China. Factory expenses at German sites are targeted to fall by a fifth next year, and production capacity across Europe is being trimmed.

Behind the scenes, tensions are simmering in the boardroom. Supervisory board member Susanne Wiegand, a defence-industry executive, is stepping down, reportedly over disagreements about the company’s culture and openness to fresh strategic thinking. The departure underscores the governance challenges facing a group still controlled by the Porsche and Piech families, Lower Saxony, and the labour unions — a structure that has historically constrained bold restructuring.

Should investors sell immediately? Or is it worth buying Volkswagen?

On the technical side, the stock’s relative strength index of 29 signals an oversold condition, but that alone offers little comfort. The real catalyst will be a credible restructuring roadmap, which management has promised to detail over the summer. In the near term, all eyes are on Tuesday, when Volkswagen pays its €5.26 dividend per preferred share, the same day Porsche AG holds its virtual annual meeting. On Thursday, the Porsche Automobil Holding SE — the group’s top holding company — convenes its own shareholder gathering and will disburse nearly €1 billion on Friday. These cash flows could amplify an already volatile trading picture.

The broader industry context only sharpens VW’s dilemma. While the Wolfsburg giant struggles with structural costs and shrinking margins, Chinese EV makers such as XPeng and Geely are advancing rapidly across Europe. XPeng’s X9 recently topped the world’s largest independent EV test in Norway, delivering 646 kilometres of real-world range. Geely, after a coordinated market launch in five European countries within 48 hours in March, has now formally entered Switzerland and Liechtenstein, covering nearly 20 core markets. Export growth for Geely hit 126% in the first quarter. Meanwhile, Mercedes-Benz has started serial production of its first electric van, the VLE, featuring a 705-kilometre range and an 800-volt charging system, though its stock remains near a 52-week low.

Volkswagen is not alone in its pain, but the speed at which the board itself acknowledges an existential crisis separates it from peers. The coming weeks will test whether the group can convert internal urgency into decisive action — or whether the political complexity of its ownership structure continues to block the path to recovery.