Volkswagen taps Wells Fargo for U.S. financing

Volkswagen’s in-house captive finance company — Volkswagen Financial Services U.S. (VWFS)— is taking a back seat to bank Wells Fargo.

Driving the news: Under the terms of a new agreement, Wells Fargo will be the main auto financing option for over 1,000 American VW, Audi, and Ducati dealerships starting in April 2025.

• VWFS will continue to service existing customer contracts and remains committed to “consumer leasing and usage-based products, including mobility solutions.”

The impact: Changes in subsidized loan rates and underwriting criteria are still murky.

Why it matters: Shedding non-core activities like U.S. financing may free up capital for investments in new markets where VW sees greater potential.

Between the lines: With elevated interest rates, rising auto loan delinquencies, and tighter lending in the U.S., VW can offload financing risks to Wells Fargo.

What they’re saying: "By aligning ourselves to respond to evolving market dynamics through this partnership, we're able to more effectively support the needs of Volkswagen, Audi, and Ducati while providing tremendous opportunities for Volkswagen Financial Services in the U.S. market in the future," Volkswagen Group of America CEO Pablo Di Si said in a statement.

What we're watching: VW is feeling the heat as its flagship brand's financial health falters, forcing the company to weigh drastic steps, like closing a major vehicle plant in Germany. 

• VW is also pulling back on plans for battery cell factories in Europe and North America as the strength of EV demand grows at a slower pace.

Go deeper (2 min. read): Auto financing gets tougher as incentives ramp up

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