Porsche has dialled back plans for its electric vehicle rollout due to weaker demand, pressure in key market China and higher US tariffs, causing the luxury sports car maker and its parent Volkswagen to slash their 2025 profit outlooks.
The move highlights the challenges for one of the most well-known car brands, which has been squeezed by its two most important markets — China and the US — over price declines and trade barriers.
Volkswagen, Europe's top carmaker, said it would take a €5.1bn hit from the far-reaching product overhaul, which delays some EV models in favour of hybrids and combustion engine cars, at its 75.4%-owned subsidiary.
The changes are a major shift for the Stuttgart-based maker of the iconic 911 model, and are expected to hit Porsche’s operating profit by up to €1.8bn this year, it said.
Slower e-vehicle market launch
“We are seeing massive changes within the automotive environment,” Oliver Blume, CEO of both Porsche and Volkswagen, told analysts and journalists in a joint call on Friday, citing a clear drop in demand for exclusive EVs.
“We have made key strategic decisions. Now it’s time to put them into action. It’s going to be a tough and long road, and it will demand our full focus and strong effort.”
Porsche said it would delay the launch of certain all-electric vehicles, adding that the new SUV above the Cayenne model would initially not be offered as an all-electric vehicle, but with combustion-engine and hybrid models.
Current models such as the Panamera and the Cayenne will be available with combustion engines and plug-in hybrids well into the 2030s, said Blume.
“Nevertheless, the existing all-electric model range is being continuously updated. With the Taycan, Macan, Cayenne and the future two-door sports car in the 718 segment, there will be an attractive BEV offering,” he said.
Profit margin outlooks cut
Porsche slashed its 2025 profit margin outlook to a maximum of 2% from 5%-7% previously. It cut its midterm margin outlook to 15% at best from 15%-17%.
“These are not margins that one would expect to see in a luxury product, at least not in a successful one,” UBS analyst Patrick Hummel said during the call.
Porsche will extend the production period of currently available vehicle models with internal combustion engines (ICE) and hybrid drivetrains, including the Panamera, into the 2030s, Blume said.
He said he was counting on more flexibility in the EU regarding Brussels' target of 100% reduction of CO2 emissions for new cars and vans by 2035.
Holding firm Porsche SE, Volkswagen’s biggest shareholder, which also owns a 12.1% stake in Porsche AG, also cut its outlook for profit after tax, while Volkswagen cut its profit margin outlook to 2%-3% from 4%-5%.
Blume said a planned reduction of US vehicle import tariffs to 15% from currently 27.5% could still take weeks as talks between Brussels and Washington over the issue are ongoing.
Volkswagen is in discussions with the US administration over an investment package that Blume said could also cover Porsche, without being more specific.
With Reuters
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