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Porsche profit warning weighs on Volkswagen guidance

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Too soon to factor trade war into outlook, CFO says

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Higher battery-electric sales diluted margins

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Costs must come down to stay competitive - CFO

(Recasts with detail from investor, media calls)

By Victoria Waldersee

STUTTGART, Germany, April 30 (Reuters) - Volkswagen

said on Wednesday that profit margins this year were

likely to be towards the bottom of its guidance range and joined

a chorus of automakers warning that U.S. trade policy was making

it almost impossible to make financial predictions.

The German group said it now expected an operating margin at

the lower end of its 5.5-6.5% guidance range because of a profit

warning by Porsche, in which it holds a 75% stake.

But that forecast doesn't include any potential impact from

U.S. President Donald Trump's import tariffs, with finance chief

Arno Antlitz telling analysts - despite their pleas - that it

was too early to make conclusive statements.

"We stand ready to work with policymakers to find solutions

to support the industry while preserving opportunities for

workers," Antlitz said, emphasising the importance of

Volkswagen's cost-cutting drive in an uncertain world.

Higher battery-electric sales, which more than doubled in

Europe in the first quarter, also weighed on margins, Antlitz

said, but added that the 25,000-euro ($28,400) ID.2 car being

built in Spain could be the company's first EV to yield

comparable margins to its combustion engine equivalent.

"There is still a lot of support necessary on the pricing

side for battery-electric cars," Antlitz said.

COST CUTS

Automakers including Mercedes-Benz, Stellantis ( STLA )

, General Motors ( GM ) and Volvo Cars

have pulled their financial guidance, citing the uncertainty

caused by constantly shifting tariff policies.

Porsche, which has no production in the United States, said

on Tuesday that tariffs led to a hit of at least 100 million

euros in April and May alone.

The Volkswagen Group is highly exposed to the tariffs, with

premium brand Audi also lacking U.S. production, though it has

said it plans to announce a location to build some of its

top-selling models in the market this year.

The group was looking at scenarios to build more models in

the U.S., including potentially at a new factory being built for

its Scout brand in South Carolina, but no decisions had been

made so far, Antlitz said.

Meanwhile, a cost-cutting programme agreed with unions late

last year was well underway, with factory costs down at the VW

brand and headcount reduced by about 7,000 people, Antlitz said.

"Rest assured that we continue to drive implementation of

the agreed measures with full force," he added.

Volkswagen suffered a 40% drop in earnings in the first

quarter, and now expects net cash flow this year towards the

lower end of its forecast of 2 billion euros to 5 billion euros

($2.3-5.7 billion) and net liquidity close to 34 billion euros.

($1 = 0.8790 euros)