Facing declining EV sales, Porsche invests €800 million in gas and hybrid models, adjusting its 2025 profit forecast


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Porsche is making a bold move in response to slowing EV demand, especially in the luxury market. The automaker is shifting focus back to combustion engines and plug-in hybrids, investing around €800 million in their development. This strategic pivot also includes advancing battery technology within Porsche's subsidiaries.

  • Due to slowing EV growth, Porsche is now focusing on developing additional gas and plug-in hybrid models
  • Costs associated with the development have led Porsche to cut its profit forecast for 2025
  • Porsche may terminate the contracts early for the bosses of its finance and sales divisions

Profit Warning & Leadership Shakeup

Porsche’s shift isn’t coming cheap. The additional investment is expected to shrink profit margins to 10-12% in 2025, well below its mid-term target of 17-19%. This has already caused concerns among investors, leading to a decline in Porsche’s share value.

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What’s Next for Porsche?

Porsche’s shift signals a rebalancing of priorities not an abandonment of EVs, but a more diversified approach. While the company continues to invest in electric mobility, it recognizes that hybrid and combustion models will play a crucial role in the future of performance and luxury cars.

This decision marks a turning point for Porsche and possibly the wider auto industry. Could this be the beginning of a larger shift away from full electrification? Time will tell.

 

FAQ

Porsche is responding to a slowdown in electric vehicle demand, especially in the luxury segment, by investing in combustion engine and plug-in hybrid models to meet evolving consumer preferences.

The company expects that the additional €800 million investment will reduce its profit margins to around 10-12% in 2025, below its mid-term target of 17-19%.

Notably, sales of Porsche's first fully electric vehicle, the Taycan, decreased by 49% in 2024, leading the company to reconsider its product strategy and reintroduce combustion engine options.

Discussions are underway regarding the early termination of contracts for key executives, including the finance and IT chief, Lutz Meschke, and the sales and marketing chief, Detlev von Platen, indicating a broader reassessment of the company's strategic direction.

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