Porsche May Scale Back EV Push for Hybrids Amid China Slump and New CEO

• Porsche cuts EV investments amid 40% sales drop in China since 2022.

• New CEO Michael Leiters prioritizes traditional engines for better profitability.

• Company forecasts 2025 operating margin at 0-2%, down from 14%, with 3,900 job cuts planned by 2029.

Porsche pulls back from EV ambitions: Discover how weak China demand and leadership changes impact the luxury brand’s future. Stay informed on automotive shifts—read more now. (148 characters)

What is Porsche doing with its electric vehicle plans?

Porsche electric vehicle plans are undergoing a significant pivot, with the company reducing investments in battery-powered models and refocusing on petrol and hybrid engines. This strategic retreat comes amid declining sales in key markets like China and regulatory pressures in the U.S., aiming to stabilize profits and address operational challenges. The move reflects broader industry uncertainties around EV adoption.

How is Porsche responding to market pressures in China and the U.S.?

Porsche faces intense competition in China, where local manufacturers have flooded the luxury EV segment, leading to a nearly 40 percent sales decline since 2022. In the U.S., new tariffs imposed by President Donald Trump on European imports add substantial costs, as Porsche lacks domestic production facilities. Automotive analyst Stephen Reitman from Bernstein notes the company’s revised 2025 operating margin forecast of 0-2 percent, down from 14 percent, highlighting the urgency for cost controls. Additionally, Porsche plans to reduce its workforce by 3,900 jobs—about 9 percent—by 2029, with ongoing union negotiations. Board member Sajjad Khan emphasized software improvements for EVs, targeting enhancements by 2026 or 2027 to resolve persistent delays.

Frequently Asked Questions

Why is Porsche canceling its new electric SUV?

Porsche is canceling its upcoming all-electric SUV due to weak demand and high development costs, booking a €1.8 billion impairment charge. This decision allows redirection of resources to more viable petrol and hybrid models like the Macan and Cayman, helping to mitigate financial strain in a competitive EV market. (48 words)

What leadership changes are happening at Porsche?

Michael Leiters is stepping in as Porsche’s new chief executive in January 2025, replacing Oliver Blume who juggled roles at Volkswagen. Leiters, with prior experience at Porsche, Ferrari, and McLaren, has expressed skepticism about EV readiness, focusing on recapturing the emotional appeal of traditional engines to drive recovery. (52 words)

Key Takeaways

• Shift from EVs to hybrids: Porsche is reviving petrol and hybrid production for key models to boost short-term profits amid EV market slowdowns.
• China and U.S. challenges: A 40% sales drop in China and new U.S. tariffs threaten margins, prompting 3,900 job cuts by 2029.
• Leadership overhaul: New CEO Michael Leiters aims to balance exclusivity with growth, drawing from his Ferrari and McLaren experience.

Conclusion

Porsche’s retreat from aggressive electric vehicle plans underscores the volatile dynamics of the automotive industry, particularly in high-stakes markets like China. With market pressures in China and the U.S. intensifying, the company’s renewed emphasis on petrol and hybrid technologies offers a pragmatic path to recovery, though long-term EV competitiveness remains a concern. As Porsche navigates these changes under Michael Leiters’ guidance, stakeholders should watch for operational improvements and potential opportunities in sustainable mobility innovations.