article image source: porsche.com (link)
Porsche shares plunged over 7% on Monday after the luxury carmaker warned of delays in its electric vehicle (EV) plans, a move expected to impact its 2025 earnings. Parent company Volkswagen also saw its stock fall by more than 7%, following news of significant spending to revamp Porsche’s lineup.
The decision marks a shift in Porsche’s EV strategy, reflecting broader struggles among European automakers who are grappling with slowing demand, a weakened global economy, and mounting pressure from Chinese competitors.
On Friday, Porsche downgraded its projected profit margin from up to 7% to just 2% or less, citing multiple headwinds including:
Rising US import tariffs
A weakening Chinese luxury car market
Sluggish EV adoption
In response, Porsche is postponing the launch of several new EVs and extending production of petrol-powered models—despite the EU’s 2035 deadline to phase out new combustion engine cars.
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A planned all-electric SUV will now debut with traditional combustion and plug-in hybrid options instead. Popular models like the Panamera and Cayenne will also continue with non-electric variants well into the 2030s.
This pivot mirrors moves by rivals BMW and Mercedes-Benz, both of which have implemented cost-cutting measures to stay competitive. Meanwhile, Chinese EV brands like BYD and XPeng are aggressively expanding, fueled by a domestic price war that has driven down average vehicle prices by nearly 20% in the past two years.
Despite Porsche’s early foray into EVs with its Mission E concept a decade ago, the latest announcements signal a cautious retreat from its earlier electrification ambitions.
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