Automotive News Europe — 2025-02-07
Automotive Industry
Porsche warned that expenses tied to expanding its product portfolio with more combustion engine and plug-in hybrid models will hurt its profitability this year.
The company will take an €800 m ($831 m) hit linked to revamping its lineup this year, lowering profit margins, Porsche said on 6 February 2025. The margin will drop to the 10% to 12% range this year, it said.
Porsche is the latest automaker to pivot back towards combustion engine vehicles amid low demand for EVs in Europe and intense competition in China from local rivals.
The company said in November it will develop new combustion-engine derivatives across its model range to meet customer demand as sales of full-electric cars fall.
Challenges with making the jump to EVs has cost the company dearly in China, where its deliveries fell 28% in 2024.
Porsche disclosed earlier this month that it may oust its chief financial officer, Lutz Meschke, and sales chief, Detlev von Platen, after they were heavily criticised for the company’s poor performance and weak share price.
Porsche said on 6 February 2025 that it expects its margin for 2024 to end up at the lower end of its forecast range, or around 14%, down from an initial projection of 15% to 17%. The company’s long term margin goal is 20%.
New ICE versions of Cayenne, Macan planned
Porsche’s costly new investments will include updating combustion-engine versions of its Cayenne and Macan SUVs, and Panamera sedans, which were originally intended to be electric-only in their new generations.
A future large full-electric SUV codenamed K1 designed to sit above the Cayenne likely will now get a combustion engine version.
In October 2024, Porsche said it planned to cut costs amid a weakening economy, growing competition in China and a slower-than-expected EV transition. The company could cut as many as 8,000 jobs through voluntary layoffs, German press reports said at the time.
Porsche shares fell 27% last year and have slumped since the company’s 2022 initial public offering. Its market capitalization has halved from a high of €109.5 bn in May 2023.