Porsche AG will invest €800 million ($831 million) in gasoline and hybrid vehicles, triggering a sharp decline last week as the luxury carmaker retreats from its electric strategy.
Executives told investors the shift to traditional engines will cut profit margins to 10-12%, far below Porsche’s 20% target. The company aims to boost revenue to €37-39 billion ($40-41 billion) while taking what it calls “extensive measures” to protect profits.
Chinese electric vehicle makers have battered Porsche’s position in Asia. BYD and other domestic manufacturers drove Porsche’s Chinese sales down 28% last year, contributing to a 3% global decline.
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The Taycan, Porsche’s electric flagship sedan, saw deliveries plunge by half to 20,800 units in 2024. The new electric Macan SUV has reached 18,000 sales since September, but technical challenges plague other battery-powered projects. The next-generation 718 sports car faces delays ahead of its planned launch, while the battery-powered Cayenne may miss its 2026 debut.
CFO Lutz Meschke now wants to add combustion engines to models originally planned as pure electric vehicles. Porsche has already committed to build V-8 engines for its Cayenne and Panamera models beyond 2030.
The strategy reversal has halved Porsche’s market value since May 2023, when it briefly exceeded parent company Volkswagen’s worth. The automaker is also facing leadership changes, with discussions underway regarding the contracts of CFO Meschke and sales chief Detlev von Platen.
Information for this story was found via Electrek, Automotive News Europe, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
