Volkswagen Stock: Trade Tensions Trigger 5% Share Plunge

Volkswagen's stock experienced a dramatic decline of over 5% on Monday, dropping to €93.40 in XETRA trading, as multiple international challenges converged to pressure the automaker's market value. The steep fall was primarily triggered by newly announced U.S. tariffs on Mexican imports, which pose a significant threat to Volkswagen's extensive production facilities in Mexico that serve the U.S. market. Adding to the company's woes, its subsidiary Skoda faces substantial tax claims in India, prompting legal action against Indian authorities. The situation is further complicated by potential impacts on PowerCo's planned battery cell factory in Canada, as new U.S. tariffs targeting both Mexican goods at 25% and Canadian energy imports at 10% threaten to disrupt the company's international production strategy.

Market Analysis Points to Continued Pressure

The latest market downturn places Volkswagen's shares significantly below their 52-week high of €128.60, edging closer to the year's low of €78.86. The company's financial performance reflects these challenges, with earnings per share dropping substantially from €7.76 to €2.42 compared to the previous year. Market experts have maintained a consensus target price of €109.13, though recent developments suggest potential for further decline as the automotive sector grapples with escalating trade tensions.