Hyundai Claims No. 2 Profit Crown as Volkswagen Drowns in Billions of Losses

Hyundai Motor Group has officially dethroned Volkswagen as the world’s second-most profitable automaker, CEO José Muñoz declared at a high-performance vehicle launch in France, widening the gap between the surging Korean conglomerate and Europe’s largest automaker now hemorrhaging cash.

The announcement came as Volkswagen continues its catastrophic 2025, posting a €1.3 billion quarterly loss while threatening to shutter German factories for the first time in the company’s 87-year history.

Muñoz Declares Victory at Genesis Magma Launch

Speaking to media at the Genesis Magma World Premiere at Circuit Paul Ricard in Le Castellet, France, Muñoz left no ambiguity about where Hyundai now stands in the global automotive hierarchy.

“We have become, already, several years in a row, the number three global OEM [by sales]. And in fact, when you consider profits, we are number two,” Muñoz told Car Expert. “So we just overtook Volkswagen very recently.”

Only Toyota remains ahead in both sales volume and profitability.

Industry data supports the claim. Hyundai reportedly logged around 6.5 trillion won (approximately $4.8 billion) in operating profit last November, according to Autoblog, outpacing Volkswagen’s estimated 4.3 trillion won during the same period.

The “Power of the Group” Strategy

Muñoz attributed Hyundai’s surge to what he calls the “Power of the Group” – a vertically integrated strategy that keeps development, battery production, and component manufacturing in-house.

“One of the key success factors of the group is what we call inside the ‘Power of the Group’. The group is comprised of more than 50 different entities that work all aligned,” he explained.

That ecosystem extends far beyond automobiles. Hyundai’s portfolio includes Boston Dynamics (robotics) and Supernal (electric vertical takeoff aircraft), positioning the company across multiple future mobility sectors.

The strategy has helped Hyundai weather tariff pressures better than competitors. While acknowledging profits had been “dented by tariffs,” Muñoz noted Hyundai “lost about 30 percent compared to last year” while competitors faced “70 percent and more profit loss.”

Volkswagen’s Spiral Deepens

The contrast with Volkswagen could not be starker.

Europe’s largest automaker swung from a €2.8 billion profit in Q3 2024 to a €1.3 billion ($1.4 billion) loss in Q3 2025, according to The Times. The German giant absorbed €4.7 billion in charges during the first nine months of 2025 related to Porsche’s failed electric vehicle strategy.

Trump administration tariffs compounded the damage. The 15% levy on European vehicle imports is expected to cost Volkswagen up to €5 billion for the full year.

Software delays have plagued the company for years. Its troubled Cariad software division burned through nearly €12 billion before posting a €2.4 billion loss in 2023, delaying crucial Audi and Porsche models by almost two years.

Several German plants now face potential closure or repurposing as the company scrambles to cut costs.

Why Profitability Matters More Than Volume

The profit shift signals a fundamental realignment of automotive power.

Volkswagen still moves massive vehicle volumes globally. But profitability increasingly determines which automakers can afford rapid EV development, battery plant investments, and long-term platform strategies.

Hyundai’s financial strength explains how Genesis can launch an ambitious high-performance sub-brand like Magma while other luxury marques tighten belts. The GV60 Magma revealed alongside Muñoz’s comments delivers 641 horsepower in Boost mode, sharing its powertrain with the acclaimed Hyundai Ioniq 5 N.

When your parent company generates billions in profit, you can afford to build 478-kilowatt drift cars.

Hyundai’s EV Flexibility Pays Off

Hyundai and Kia have posted record revenues through a flexible platform strategy allowing rapid pivots between electric vehicles and hybrids.

Strong global demand for Hyundai’s electric models, including larger three-row EVs like the Ioniq 9, has maintained momentum even as broader EV markets fluctuate.

The Korean automaker also benefits from localized U.S. production at its Georgia Metaplant, which began producing Ioniq 5 vehicles ahead of schedule in late 2024. That domestic manufacturing footprint insulates Hyundai from import tariffs hammering competitors.

EVXL’s Take

The timing of Muñoz’s announcement was surgical.

While Volkswagen executives scramble to explain billions in losses and factory workers protest potential closures, Hyundai’s CEO stood at a French racetrack unveiling a 641-horsepower performance EV and casually mentioned his company now makes more money than Europe’s automotive crown jewel.

This is not a temporary market fluctuation. It is the culmination of years of strategic divergence we have documented extensively.

Volkswagen’s troubles run deep. As we reported in October, the German automaker posted a €1.3 billion quarterly loss driven by Porsche’s EV strategy collapse and Trump tariffs. That followed a 38% profit crash in the first half of 2025 as lower EV margins devoured earnings.

The desperation is visible in VW’s recent moves. The company now admits its Rivian partnership technology could power gasoline cars – a transparent hedge against EV uncertainty. It has abandoned German engineering DNA entirely in China, partnering with Xpeng to build vehicles it cannot design competitively itself.

Hyundai chose a different path. The company launched its Georgia EV plant ahead of schedule and built a diversified technology empire spanning automotive, robotics, and air mobility. That “Power of the Group” vertical integration Muñoz referenced includes Supernal, Hyundai’s electric air taxi subsidiary, which we covered when the company unveiled its IONIQ 9 as a drone operations platform for environmental restoration.

The next six months will be brutal for Volkswagen. German factory closure decisions loom, tariff costs continue mounting, and Chinese competitors keep gaining ground in markets VW once dominated.

Hyundai faces challenges too. Tariffs have dented profits, and the post-tax credit EV market remains volatile. But a company generating $4.8 billion in monthly operating profit has options a company posting billion-dollar losses does not.

The automotive hierarchy has officially reshuffled. Hyundai is not waiting for permission to claim its new position.