(MENAFN) Germany-based automotive leader Volkswagen revealed on Thursday that U.S. customs tariffs are expected to add an extra cost of €5 billion (around $5.8 billion) to the company’s expenses this year.

The automaker reported a $1.3 billion deficit for both the third quarter and the January-to-September period.

In contrast, the company had earned a profit of €2.83 billion during the same timeframe last year.

Volkswagen's earnings for January through September fell sharply by 58% year-on-year, reaching €5.4 billion.

The company also logged €4.7 billion in costs during the first nine months, largely attributed to adjustments in Porsche's electric vehicle strategy.

Arno Antlitz, the Chief Financial Officer, commented in a press release: “In the first nine months of the year, we have seen a mixed picture.

On the one hand, there is the market success of our combustion engine and electric vehicles. On the other hand, the financial result is significantly weaker compared to the previous year.”

He explained that part of the weakness stems from the increased production of lower-margin electric vehicles.

Antlitz also noted: “Additionally, we recorded charges of 7.5 billion EUR, primarily from increased tariffs, the adjustment of the product strategy at Porsche, and a goodwill impairment at Porsche.”

He added that rising trade tariffs and the consequent negative volume impacts are expected to weigh on the company by up to €5 billion over the entire year.

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