Lamborghini and Rolls-Royce both face pressure from US import taxes and a stalling electric vehicle pivot, but their responses differ markedly
Two of the world's most prestigious carmakers reported contrasting fortunes this week, yet both pointed to the same forces reshaping the top end of the global automotive market: American tariffs, Middle East instability and a faltering shift to electric vehicles.
Lamborghini, the Italian supercar manufacturer owned by Volkswagen through its Audi subsidiary, delivered a record 10,747 cars in 2025, generating $3.7 billion in revenue, a 3.3% rise on the previous year.
The headline figures, however, masked a squeeze on profitability.
Operating income fell to $885 million from a record $962 million in 2024, with the company's profit margin slipping to 24%.
Chief executive Stephan Winkelmann attributed the decline partly to a 15% US import tariff on European vehicles introduced by the Trump administration, which cost the broader auto industry nearly $35 billion last year, according to an Automotive News analysis.
"Being the US, by far our biggest market, we could not increase the price at the same level as the tariffs were increased, and at the same time the market was going down," Winkelmann told Fortune magazine.
Lamborghini raised prices on its Temerario and Urus models by 7% and its Revuelto by 10%, but could not pass on the full tariff burden to buyers without further dampening demand.
Rolls-Royce, the Goodwood-based luxury carmaker owned by German manufacturer BMW, faces a different configuration of the same pressures.
The company makes around 5,600 cars a year, a fraction of Lamborghini's volume, and its chief executive, Chris Brownridge declined to specify what tariff impact the business had absorbed.
Where the two companies most visibly diverge is on electrification, and the contrast is sharper than it first appears.
Rolls-Royce this week abandoned its pledge to sell only electric vehicles by 2030, a target set by its previous chief executive Torsten Müller-Ötvös when the company launched its first fully electric model, the Spectre, in 2022.
Brownridge said sustained client demand for V12 internal combustion engines made the original goal untenable.
"We recognise some clients would rather have a V12 engine," he said. "The V12 is part of our history."
Lamborghini's position is more nuanced than the headlines suggested.
Winkelmann recently pushed back against the widely circulated characterisation of EV development as "an expensive hobby" for low-volume manufacturers, saying the quote was "a bit taken out of context" and that Lamborghini had not abandoned electric car development.
Instead, the company has shifted the targeted launch of its first fully electric model to after 2030, while its fourth model line, the Lanzador, will now arrive before then as a plug-in hybrid, using a variant of the Urus SUV's 4.0-litre twin-turbocharged V8 powertrain rather than the pure-electric configuration originally planned.
The strategic overhaul contributed to last year's profit decline alongside the tariff hit.
Winkelmann said a central challenge for any future Lamborghini electric car will be emotional appeal, and specifically sound, an element he regards as fundamental to the brand's identity.
"One of the biggest topics of rejection of full-electric cars is the missing sound," he said, adding that the company was focused on finding an authentic solution rather than simply playing back a recorded engine note.
"You don't want something which is not real," he said.
Both companies share exposure to Middle East turbulence, with the ongoing war in Iran threatening a region that has become a significant luxury car market.
The United Arab Emirates alone typically sees more than 300,000 vehicle sales a year, with around 20% being premium imports, according to data firm GlobalData.
Brownridge said Rolls-Royce was working to facilitate deliveries to clients in the region despite logistical difficulties, while Winkelmann said Lamborghini would lean more heavily on Europe, Japan and South Korea to compensate for softness in both the US and China.
The two brands are not alone in recalibrating their ambitions.
Bentley, another UK-founded luxury marque owned by Volkswagen, pushed its all-electric deadline from 2030 to 2035 in 2024 and announced hundreds of job cuts this week at its factory in Crewe, Cheshire.
Honda told investors last week it expects a $15.7 billion writedown as it restructures its electric vehicle division, while Stellantis, the French automotive group that owns Fiat and Jeep, booked more than 22 billion euros in charges in February, largely linked to reversing its EV strategy.
For Winkelmann, the direction of travel is clear, even if the destination remains uncertain.
"We will follow very closely the rate of acceptance of electric cars in the future for our types of customers," he said.