Aston Martin Q3 2025: lower volumes, weaker margins, and a push to cut cash burn
Aston Martin Lagonda’s third quarter shows the strain of tariffs, China weakness and a thin slate of Specials. Revenue fell 27% year on year to £285.2m, with wholesale volumes down 13% to 1,430 cars. Gross margin slid to 29.0% and the adjusted operating loss widened to £50.6m. Loss before tax ballooned to £111.9m.
Management is leaning hard on cost control and the long-trailed Valhalla launch to steady the ship into Q4 and 2026. Capex and SG&A are being cut again, while the product plan is being reshaped to lower 5-year spend.
Headline numbers that matter to shareholders
| Metric | Q3 2025 | Q3 2024 | Y/Y change |
|---|---|---|---|
| Total wholesales (units) | 1,430 | 1,641 | (13%) |
| Revenue | £285.2m | £391.6m | (27%) |
| Gross profit | £82.8m | £144.0m | (43%) |
| Gross margin | 29.0% | 36.8% | (780 bps) |
| Adjusted EBIT | £(50.6)m | £(21.7)m | (133%) |
| Loss before tax | £(111.9)m | £(12.2)m | (817%) |
| Net debt (period end) | £1,381.0m | £1,216.5m | 14% |
Year to date, revenue is £739.6m and adjusted EBITDA is just £7.7m with a 1.0% margin. Free cash outflow YTD is £415.0m and adjusted net leverage stands at 8.3x.
What drove the weak quarter
- Tariffs and China softness – management cites the “sustained impact of US tariffs” and “extremely subdued” demand in China following ultra-luxury tax changes at end-July.
- Model mix – planned lower deliveries of high-price Specials crushed the total average selling price, down 20% to £178k in Q3. Core ASP held at £177k, but that could not offset the Specials shortfall.
- Dealer support and FX – gross margin was hit by support for dealers (notably in China) and a weaker US dollar versus sterling.
- Regional skew – UK wholesales fell 32% in Q3, Americas down 9%, APAC down 24%. EMEA ex-UK grew 10% on timing effects.
- Segment mix – SUVs were down 23% and Specials down 95% year on year in the quarter; Sport/GT declined 4%.
Cash, debt and liquidity: still tight, but stabilised quarter on quarter
Cash used in operations YTD was £89.4m, reflecting weaker profitability partly offset by a smaller working capital outflow. Inventories rose £78m ahead of new derivatives and Valhalla, deposits increased £43m thanks to Valhalla collections.
Capex YTD was £254.0m. Net cash interest paid rose to £71.6m. Free cash outflow YTD was £415.0m.
- Gross debt at 30 September 2025: £1,629.8m, up after drawing on the Revolving Credit Facility.
- Cash balance: £247.4m; total liquidity (cash plus facilities): £247.8m.
- Net debt: £1,381.0m, higher than 31 December 2024 (£1,162.7m) due to lower cash and more bank borrowings.
Opinion: leverage is high and interest costs are rising, so the capex cuts and push to margin accretion in Q4 are necessary. Liquidity ticked up versus 30 June, but the cushion is still thin for a company at this scale.
Cost actions and product plan reset
- FY 2025 capex now guided to c. £350m (cut from c. £375m at the Q3 update and c. £400m at the start of the year).
- Adjusted operating expenses excluding D&A (often called SG&A) targeted at c. £275m for FY 2025 (FY 2024: £313m).
- Five-year capex target trimmed to c. £1.7bn from c. £2bn, with more details promised at full year results.
Opinion: disciplined spend is the right lever while volumes reset. The key is not to starve the product pipeline. Management says the review will still deliver “class leading products”, but execution risk is real.
Valhalla, new derivatives and what to expect in Q4
Deliveries of Valhalla, the first series production mid‑engined plug-in hybrid, began in October. AML expects c. 150 units in Q4 2025, subject to no disruption from the US federal shutdown or tariff quota system. Around 500 Valhallas are planned for FY 2026, with more than 50% already ordered.
Core range support comes from DBX S, Vantage S and the Volante 60th anniversary editions in Q4. Vanquish Volante started deliveries in Q3. DB12 S begins in H1 2026. The core orderbook remains unchanged, extending up to five months.
Guidance flags sequential improvement in Q4 2025, a full-year gross margin in the low 30s%, and wholesale volumes down mid-to-high single digits versus 2024’s 6,030 units. Adjusted EBIT for FY 2025 will be below the lower end of pre-6 October consensus (£(110)m). Positive free cash flow in H2 2025 will not be achieved, though Q4 outflow should improve.
Risks to the recovery path
- US tariff quota mechanism – adds forecasting uncertainty into year end and potentially each quarter from 2026.
- China demand and taxation – the luxury tax change is still biting, with APAC volumes down 24% in Q3.
- Supply chain – heightened risk flagged after a recent cyber incident at a major UK automotive manufacturer.
- Balance sheet – adjusted net leverage at 8.3x keeps financial flexibility tight until margins improve.
My take: near-term pressure, 2026 the focal point
This is a tough print: volumes light, margins squeezed, and losses widening. The positive bits are the orderbook stability, the October start of Valhalla deliveries, and firm cost discipline. If the c. 150 Valhallas land in Q4 and the new derivatives lift mix, Q4 should look better than Q3, but FY 2025 remains a reset year.
The bigger swing factor is 2026. Management points to c. 500 Valhalla units next year, improved operating leverage, and a slimmer capex envelope. That could drive a meaningful step-up in profitability and cash generation – provided tariffs and China do not throw fresh curveballs.
Jargon buster
- Wholesale volumes – cars sold to dealers, not end customers.
- ASP – average selling price per car. “Core ASP” excludes limited-run Specials.
- Specials – limited edition or ultra-high-price models. These heavily influence mix and margins.
- Adjusted EBIT/EBITDA – operating profit before one-off items; EBITDA also excludes depreciation and amortisation.
- SG&A – selling, general and administrative costs, essentially overheads.
What I’m watching next
- Q4 deliveries of Valhalla, DBX S and Vantage S and the impact on gross margin per vehicle.
- Cash conversion in Q4 given the expected rise in receivables at period end.
- Any clarity on the US tariff quota and China demand trends.
- Detail on the reduced 5-year capex plan at the full year results.
Investor resources
- Q&A at 08:30am BST: Join here
- Results and presentations: Aston Martin investor centre
