If the question is how Seat has lost 100% of its profit in its best year, the answer is simple: Chinese electric car

The electric car continues to be Seat SA’s great debt. The company that houses Seat and Cupra could be popping the champagne with record numbers, but a decision has destroyed its profit margin despite billing more than ever and selling more cars than ever.

The numbers. Seat SA has presented results. The company that houses Seat and Cupra has made public its 2025 numbers with record figures that invite optimism:

• 15.3 billion euros in turnover (5.1% more than the previous year)
• 586,300 cars delivered (5.1% more than the previous year)
• More plug-in hybrids sold than ever, with a growth of 62.9%
• More electric vehicles sold than ever, with a growth of 65.9%

But the figures are obscured when we talk about benefits. And the company barely retained 40.9 million euros of net profit, 92% less than the previous year.

And the data on its operating profits is even more dramatic. Seat indicates a million euros with a drop of 99.8% but that figure is subject to IFRS (international financial standards). Seat reports in its results note of -93.1 million euros as a result of exploitation with Spanish financial standards, along with a cash flow of -431 million euros after investing 1,300 million euros in CAPEX and R&D, which add up to a total of 6,200 million euros invested in this item since 2020.

A strategy that works. In 2022, with Wayne Griffiths at the helm of the company, Seat SA took a turn in its strategy. The then CEO said that “Cupra is not the end of Seat. Cupra gives Seat a future and the future is electric. The future is Cupra.” Three years later, Cupra has sold 328,800 units, 56.1% of Seat SA cars, with a growth of 32.5% compared to 2024.

So, Seat SA had just lost more than 450 million euros in two years. The company has managed to refresh its image and move customers towards more expensive models that leave a greater profit margin. It is never good news to sell fewer cars (Seat sold 257,400 units in 2025, 17% less than the previous year) but the company has managed to compensate for this decline by selling more expensive cars. And not only that, increasing sales.

The electric car. In addition, the company has achieved a substantial increase in sales in its most electrified models. However, if Seat has lost relevance in the market it is because its offer, right now, is anti-competitive where electrification is demanded. In fact, the ECO label (and in mild hybridization versions) will have to keep waiting in models like the Ibiza or the Arona.

Markus Haupt, new CEO of Seat since Griffiths leftalready made it clear a few months ago that It was impossible to launch an electric car with the Seat logo right now. The problem, he pointed out, is that it was too expensive and that prevented a positioning aligned with the role that Seat is currently playing within the Volkswagen Group.

From Germany they understood that that affordable electric role had to be covered by Skoda and Seat will be relegated to an access brand to the motor market, with cars that are already veterans in the market and very little electrified engines. Cars in which no money has been invested but they continue to report profits despite the fact that their sales have been declining. Looking at the volume of electric sales in Europe, it seems that it makes sense not to continue loading up on models that can be cannibalized within the Volkswagen Group.

And the Tavascan. Seat SA’s commitment to electric cars was to come with the Cupra Tavascan. The car was sold as a turning point for the brand with the aim of making it clear that we were facing a new image and that Cupra was not only seen as the sports version of Seat. Cupra aimed to make itself in a journey that had already begun with the Born.

The Volkswagen Group decided early that for him Cupra Tavascan was competitive it had to be taken to China. But with production already committed, The European Union imposed harsh tariffs on carssince it has the participation of SAIC. The base 10% soared by another 37.6%. That has eaten into any kind of profit generated with a car that had this as its primary objective.

These tariffs have not had to be paid by the Skoda Enyaq, Audi Q4 or Volkswagen ID.5, all produced in Europe. Last February, the European Commission confirmed that had reached an agreement to withdraw tariffs on this car as an exceptional case. Cupra has promised not to lower the price and to comply with an export quota. Both figures are, however, confidential.

at losses. Although Cupra has promised not to lower the price, it is highly unlikely that the company would have opted for this once the tariffs had been lifted. And it is that the Cupra Tavascan was being sold at a loss despite exceeding 40,000 euros per unit. Aware that it was impossible to sell the car at a price that would allow them to make money with such high tariffs, Cupra preferred to eat that cost and lose money with each car sold.

The strategy may make sense because the production commitments in China are maintained and it has helped the company to put the car on the street, make it visible and invest in brand image. Already in 2024 the brand expected to lose 500 million euros with the sale of the Tavascan.

An optimistic view. The good news for Seat is that, at last, they have managed to get their Tavascan to start generating profits for the company instead of eating them. But also that Cupra remains strong with its electrified bet. The Cupra Born has been recently renovated and the Raval will arrive in 2026, made in Martorell.

The company’s goal is to achieve, by 2030, a profit margin of 6%. To do this, they say, they will focus on cost savings in their structure of 20%. The commitment to Spain as a mobility hub is key since the Volkswagen Group’s small cars will be produced here.

Photo | Seat SA

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