Why German economists point to BYD as a possible owner of Volkswagen

The Volkswagen Group’s 2025 profit drop of more than half has reignited a debate in Germany that until recently would have sounded implausible: that Europe’s largest automaker could end up under Chinese control. The hypothesis was raised by economists Niall Ferguson and Moritz Schularick in an interview with the German newspaper Süddeutsche Zeitung.

Asked about a possible risk of bankruptcy, Schularick said he considers it more likely that the group will be bought by a Chinese manufacturer, if it continues to lose space in the global market. Among the possible interested parties, the economist mentioned BYD, today the world’s largest manufacturer of electrified vehicles. The Chinese company has not commented on the matter or indicated interest in such an operation, and the two economists point out that the scenario is not imminent.

The numbers behind the alert

The balance of 2025 explains the tone. Volkswagen’s operating profit fell 53 percent to 8.9 billion euros from 19.1 billion euros, below the 9.4 billion euros forecast by analysts. The operating margin fell from 5.9 percent to 2.8 percent, with revenue stable at 322 billion euros. American tariffs, the loss of share in China and the strategic shift of Porsche, whose operating profit fell 98% to 90 million euros, weighed.

“We are operating in a completely different environment,” said global CEO Oliver Blume. The restructuring plan foresees the cut of about 50 thousand jobs in Germany by 2030, close to 35 thousand in the Volkswagen brand alone. For Ferguson, the European mistake was to assume that tradition and reputation would be enough to sustain technological leadership, while China accumulated decades of public investment in batteries and the supply chain.

The aforementioned company also cuts costs

The hypothesis comes at a time when BYD itself adjusts the operation. The company ended 2025 with record revenues of about US$ 116 billion and 4.6 million electrified vehicles sold, but announced in April the cut of approximately 100 thousand jobs, about 10% of the global staff, amid the price war in China. In May, according to Reuters calculations, the automaker’s global sales grew 0.3% and interrupted eight consecutive months of retraction. The economists themselves point to overcapacity and dependence on subsidies as weaknesses in the Chinese sector.

There is also a little-remembered corporate barrier: Volkswagen does not have dispersed capital. The holding company Porsche SE holds the majority of the voting rights, and the state of Lower Saxony retains a veto-wielding stake, which is guaranteed by the Volkswagen Act. In Brazil, the two companies continue to expand: Volkswagen expects R$ 20 billion by 2028, and BYD expands the plant in Camaçari (BA), which has already received export orders for 100 thousand vehicles.