Porsche will launch new gas-powered and plug-in hybrid (PHEV) cars as its EV models fail to gain traction. The sports car maker warned that the new combustion engine models and battery development expenses would hurt profits this year, sending share prices plunging.
Porsche plans new gas-powered cars to boost profits
After announcing that it expects profit margins to be between 10% and 12% this year, Porsche said it’s taking “extensive measures” to boost short and medium-term profits.
The forecast is well below Porsche’s long-term goal of an operating return on sales of more than 20%. To boost profits, the company announced plans to add new gas-powered (combustion engine) and plug-in hybrid vehicles to its lineup.
Porsche warned the new models and additional battery investments would take a hit on profits this year, costing an extra 800 million euros ($830,000).
The shift comes after Porsche’s deliveries fell 3% last year, with China, one of its most important markets, leading the downfall. Deliveries in China plunged 28% as it failed to keep up with domestic EV makers like BYD, Xiaomi, and XPeng.
Last week, Porsche said it was in talks over ending contracts for CFO Lutz Meschke and Detlev von Platen, head of sales and marketing.
After introducing the upgraded 2025 model last year, Porsche delivered just over 20,800 Taycan models, nearly 50% fewer than in 2023.
Porsche also began deliveries of its second electric vehicle, the Macan, at the end of September. This vehicle should help provide some relief this year. The company said the Macan EV launch “literally electrified us” after delivering over 18,000 models by the end of 2024.
Following the updated guidance, Porsche’s stock suffered one of its worst days since listing in 2022. Porsche, which was once valued higher than parent company Volkswagen, has watched its market cap dwindle in half from an all-time high in May 2023.
Electrek’s Take
Porsche wants to improve profits by adding new gas-powered cars, but this will likely only set it back further. The sports car maker is already struggling to keep up with BYD and others in China, which was its second-largest sales market in 2023, behind North America.
Taycan sales fell to just 4,747 in the US last year, 37% less than Porsche sold in 2023. Although the new model year rolling out is part of the reason, even Q4 sales were over 40% lower than the year before, at just 1,353 units.
With pure EV makers like Lucid and Rivian gaining momentum and others like Volvo, Genesis, and GM’s Cadillac launching new models, Porshe could lose out in the long term.
The situation is even more severe in China, where BYD, Xiaomi, and other domestic automakers are squeezing foreign brands out of the market.
Xiaomi, which began delivering its first self-developed EV, the SU7, last April, delivered over 135,000 models in 2024. This summer, it will launch its second EV model, the YU7.
Meanwhile, recent reports suggest Porsche could delay more electric models, including the Cayenne EV, due out in 2026.
Putting short-term profits ahead of long-term brand building could set Porsche up for failure. The company has already backtracked on its goal of having 80% of global deliveries electric by 2030, so what’s next?
Will Porsche turn things around? Or will it continue losing market share as the industry shifts to EVs? Drop us a comment below and let us know your thoughts.
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