Preliminary bids for Volkswagen’s diesel engine subsidiary, Everllence, have significantly surpassed internal valuations, reaching approximately €8 billion. This figure is over 30% higher than initial estimates of between €5 and €6 billion. Binding offers from the six financial investors are anticipated within the next six weeks.
Investor Interest Highlights Sector Stability
The bidding consortium includes prominent private equity firms such as Blackstone, Brookfield Asset Management, Advent International, Bain Capital, EQT, and CVC Capital Partners. Japanese diesel engine manufacturer Yanmar has also submitted an offer. Market observers note that industrial enterprises like Everllence—formerly MAN Energy Solutions—are viewed as stable assets, with business models largely insulated from disruption by artificial intelligence. Volkswagen’s current plan is to retain a minority stake of 30 to 40 percent in the unit, which specializes in marine engines and power plant turbines. For the 2024 fiscal year, Everllence reported revenues of €4.3 billion and an operating profit (EBIT) of €337 million.
A successful divestment at this valuation would provide Volkswagen with substantial financial flexibility. The automotive giant is navigating intense competitive pressure from Chinese manufacturers, elevated import tariffs, and the costly transition to electric vehicle production.
Operational Challenges Impact Earnings
The group’s financial performance for the first nine months of 2025 revealed a stark contrast between top-line revenue and profitability. While sales revenues reached €238.7 billion, the operating result collapsed by 58 percent to €5.4 billion. This decline was driven by one-off burdens totaling €4.7 billion, stemming from goodwill impairments, adjustments to capitalized project costs, and expenses related to revised product planning at Porsche. Additional headwinds included U.S. import tariffs and the European CO₂ fleet regulations.
Amid these challenges, the automotive net cash flow showed resilience, coming in at approximately €6 billion. This represents an improvement of €1 billion year-on-year and slightly exceeds internal targets. This positive cash flow development occurs against the backdrop of a comprehensive cost-reduction initiative aiming to lower expenses by 20 percent by 2028.
Electric Vehicle Strategy Shows Diverging Regional Results
Globally, Volkswagen’s battery-electric vehicle (BEV) share of deliveries increased from 8 to 11 percent in 2025. A notable bright spot was Europe, where BEV volume surged by 66 percent, allowing the company to claim a 27 percent market share for electric vehicles in the region. However, total group deliveries experienced a slight dip of 0.5 percent compared to 2024, finishing at 8.98 million units—just below the nine-million mark.
This follows a 2.5 percent decline in BEV sales during 2024, heavily influenced by an 8.3 percent drop in the crucial Chinese market to 2.2 million vehicles. In contrast, North American deliveries demonstrated strong growth, advancing by 18.4 percent to over 592,000 units.
Strategic Moves in Key Markets
In China, the SAIC-Volkswagen joint venture unveiled the interior of its new flagship, the ID. ERA 9X SUV, in late February. At 5,207 millimeters in length, it will be the brand’s largest SUV to date, with market launch scheduled for March. The JV has outlined an ambitious product offensive, planning to introduce six new electric models in 2026. This portfolio will include two extended-range electric vehicles, three plug-in hybrids, and one pure battery-electric model.
Elsewhere, Volkswagen’s battery unit, PowerCo, has provided approximately 2,000 employees at its Salzgitter site with job guarantees through the end of 2030. In the United States, the UAW union ratified the first collective bargaining agreement for the Chattanooga plant with 96 percent approval. The contract includes cumulative wage increases totaling 21.6 percent by 2030.
Investors will soon assess whether these structural advances are reflected in the full-year results. Volkswagen is set to publish its complete 2025 annual report on March 10. The dividend proposal will be put to a shareholder vote at the Annual General Meeting on June 18.
