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Porsche shifts gears: More petrol and hybrid models as EV sales stumble
Porsche faces a challenging financial year with an €800 million loss due to underperforming EVs and high costs in customisation and battery technology. Profit margins may fall to 10%, prompting concerns among investors and potential leadership changes within the company.
Porsche is facing a tough financial year, with the luxury carmaker revealing it will take a hit of €800 million (£682 million). The reason has been attributed to the expansion of its range of petrol and hybrid models after its electric vehicle (EV) strategy did not go as planned.
The all-electric Taycan had a great start when it launched in 2020, but sales have since dipped. Meanwhile, the new EV version of the Macan SUV has not quite lived up to expectations. This shift has left investors worried, especially since Porsche had set ambitious goals when it went public two years ago.
Now, the automaker says its profit margin could drop to as low as 10 per cent this year—far from the 20 per cent it originally aimed for. As a result, Porsche’s stock took a big hit on Friday, falling to its lowest point since the listing and losing half its market value compared to May 2023.
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Bernstein analyst Stephen Reitman called Porsche’s outlook a “major concern” and urged the company to explain its plans to reassure investors. Shares fell as much as eight per cent in early trading in Frankfurt before bouncing back slightly. Over the past year, the stock has dropped by more than 30 per cent.
Like other carmakers, Porsche has stepped back from its EV push, blaming lower-than-expected demand. This has been especially damaging in China, a key market where sales have fallen. Now, there’s talk of leadership changes, with reports suggesting that Chief Financial Officer Lutz Meschke and Sales Chief Detlev von Platen could be on their way out.
According to a Bloomberg report, the financial strain is not just about EVs. Porsche is also spending more on car customisation and battery tech, adding to the costs. With so much uncertainty, investors are understandably nervous about what is next for the brand.
(With inputs from Bloomberg)
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Business NewsAuto NewsPorsche shifts gears: More petrol and hybrid models as EV sales stumble
First Published:7 Feb 2025, 05:20 PM IST
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