Volkswagen Group is reportedly in advanced discussions with the U.S. government regarding a potential investment agreement that could strengthen the German carmaker’s manufacturing footprint in North America. By ILM.

The talks come as the company continues to navigate tariff pressures, restructuring costs and profitability challenges across its global operations. Sources told Reuters that negotiations focus on expanding Volkswagen’s U.S. presence to secure federal support for future projects, though details on timing and scale remain under discussion.

The prospective deal follows a period of mixed financial performance for the Volkswagen Group. In July, the company reported first-half 2025 sales revenue of €158.4 billion, broadly unchanged from the previous year, but noted a 33% decline in operating profit due to higher U.S. tariffs and restructuring expenses. Vehicle sales in North America fell 16% in the same period, reflecting the impact of import duties and market uncertainty.

For Volkswagen, securing U.S. government backing for new investments could help offset the headwinds created by tariffs and provide a stronger platform for electrification projects in the region. A final decision on the deal is expected in the coming months.