Last week, Porsche all but confirmed a major slowdown in its electric vehicle (EV) rollout. The company blames its closing of stores on softening demand and intensified competition for the move. The luxury carmaker has recently announced that it would push back the launch of its latest electric vehicles. Yesterday’s decision sent its shares tumbling by more than 7%. This deterioration illustrates investor fears that the stoppages will weigh on Porsche’s earnings estimates for 2025.
Porsche’s announcement comes at a pivotal moment as competition within the automotive industry begins to reach a boiling point. Chinese manufacturers such as BYD and XPeng are raising the stakes. Yet the company’s growth comes despite facing a cooling economy that has lessened appetites for high-end autos. This added challenge complicates the necessary electric mobility transition even further for them.
The German automaker stated that it would extend the production of its combustion engine models in response to these challenges. To be clear, current offerings—the four-door Panamera and the Cayenne—will still be available with combustion options for years to come, well into the 2030s. Porsche wants to have its cake and eat it too by continuing to build its classic petrol-powered sports cars while going all-electric amid changing market conditions.
The European automotive market is under extreme duress. The 2035 deadline for banning the sale of new petrol and diesel cars is looming ever closer. Porsche finds itself in this grim environment. It’s a precarious tightrope, balancing its traditional muscle memory with the need to pivot toward the growing wave of electrified demand.
Porsche is in deep trouble, except for the price war in their home EV market. In the last two years, prices of cars in China have tanked by an average of 19%, now costing an average of about 165,000 yuan (£17,150; $23,190). This sudden price decrease has created a dramatically less favorable environment for foreign cars. International competition, including Porsche, finds it much harder to compete in China now.
Recognizing these challenges, Porsche recognized a few things affecting its strategic choice. The company pointed to “US import tariffs, the decline in the Chinese luxury market, and the slowdown in the ramp-up of electric mobility” as significant hurdles.
“US import tariffs, the decline in the Chinese luxury market, and the slowdown in the ramp-up of electric mobility.” – BBC
As Porsche looks ahead, it must reconcile its rich heritage of combustion engines with the urgent need to pivot towards sustainable electric solutions. The next few years will be telling for the firm. It will have to address these complexities in order to protect its long-term viability in an automotive market that is rapidly changing.