Automakers can earn revenue across a vehicle’s life, not just when they sell a new car. Parts and service, financing and leasing, insurance, used vehicles, software and connected services, and mobility offerings can all contribute. But revenue is not profit: each activity has its own costs, risks, and investment needs, and there is no established industry-wide ranking of which non-vehicle business is most profitable.
How automakers make money across a vehicle’s lifecycle
A manufacturer may operate a broader business than vehicle design and assembly. Volkswagen describes a value chain that includes financing and leasing, insurance, maintenance contracts, repair and replacement parts, rental, subscriptions, charging infrastructure, and recycling. These activities can extend the relationship with a customer before and after the initial vehicle sale. Volkswagen Group’s 2025 Annual Report calls its business a “broadly distributed and complex value chain.”
Parts, repairs, and aftersales
Genuine replacement parts, workshop services, and other aftersales products can produce revenue after the original vehicle delivery. Volkswagen’s revenue disclosures also separately identify used vehicles, third-party products, and license revenue. These activities may have different margins and timing from manufacturing a new vehicle; their presence in a company’s accounts does not by itself show how profitable they are. Volkswagen’s revenue note sets out these categories.
Financing, leasing, and insurance
A captive finance business can earn revenue through financing and leasing and may also offer insurance or maintenance contracts. Returns depend on more than the number of contracts: funding costs, interest rates, credit performance, vehicle residual values, and the cost of servicing obligations matter. Volkswagen reported depreciation pressure tied to residual values in its Financial Services discussion, illustrating how a finance-related business can face losses even while generating substantial revenue. Its annual report’s revenue and segment disclosures should be read as measures for Volkswagen and its reporting periods, not as an industry benchmark.
Used vehicles and mobility offerings
Used-vehicle sales, rentals, subscriptions, and other mobility services can broaden the business beyond new-car delivery. Their economics depend on the assets and services involved, including inventory exposure and operating costs. Whether these activities sit within a manufacturer, a finance division, or another business unit varies by company.
Software and connected services
Connected features, paid memberships, digital services, and over-the-air (OTA) upgrades can create additional revenue opportunities. Li Auto’s 2025 Form 20-F describes internet connection services, OTA upgrades, membership, non-warranty aftersales, parts, and accessories in its revenue model. That filing demonstrates that such offerings can appear in an automaker’s reported business; it does not establish that they are material or highly profitable across the industry. Li Auto’s investor-relations filings
Revenue is not the same as profitability
To assess a business line, separate the money it brings in from the operating result left after relevant costs. Volkswagen Group’s fiscal 2025 results illustrate the distinction:
| Volkswagen Group reporting unit | 2025 sales revenue | 2025 operating result |
|---|---|---|
| Group | €321.913 billion | €8.9 billion |
| Automotive division | €290.390 billion | €5.3 billion |
| Financial Services division | €62.136 billion | €3.7 billion |
These are Volkswagen-specific fiscal 2025 figures, not industry averages. Division revenues should not be added as though they were entirely incremental Group revenue: the report includes consolidation adjustments. Volkswagen also says its Chinese joint ventures are equity-accounted, which affects how their results appear in the Group’s reporting. Volkswagen’s segment reporting provides the accounting context.
What can change returns from one year to the next?
Revenue streams do not operate in a vacuum. Volkswagen cited tariffs, CO₂ fleet regulation, negative mix, pricing and exchange-rate effects, impairment and product-planning costs, and expenses related to establishing its battery business when discussing its 2025 results. These pressures can affect the whole company even when it has substantial aftersales or finance activity. Volkswagen’s 2025 earnings discussion describes these factors.
- Costs and investment: Manufacturing, warranty and service commitments, product development, and new business investments all affect what remains as operating result.
- Rates and asset values: Financing returns can be affected by funding costs and vehicle residual values.
- Volume, mix, and pricing: The number and types of vehicles sold, together with transaction prices, influence the underlying vehicle business and related services.
- Currency and regulation: Exchange rates and emissions rules can alter costs, pricing, and reported results.
- Reporting boundaries: Divisions, joint ventures, and consolidation adjustments determine what is included in a company’s reported revenue and operating result.
How to compare automakers’ non-vehicle businesses
A useful comparison needs consistent reporting units and periods, and should distinguish the scale of a business from its returns. For each company, check:
- Which measure is being compared? Revenue, operating result, and operating margin answer different questions. Do not infer profit from revenue alone.
- Which activities are included? One company may put financing, leasing, or mobility services in a dedicated division while another reports them elsewhere or through a joint venture.
- When is revenue earned? A vehicle delivery, a repair visit, and a recurring service may be recognized at different points in the customer relationship.
- What costs and risks accompany the activity? Consider funding, residual values, inventory, warranty obligations, regulation, currency, and capital requirements.
- Is the evidence company-specific or comparable across firms? Volkswagen’s and Li Auto’s filings show possible business activities, but their categories and business models are not directly comparable.
The available company examples do not establish that any one non-vehicle activity is the most profitable across automakers. The answer depends on the manufacturer’s business model, accounting boundaries, market conditions, and the costs attached to each stream.
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