Porsche’s stock experienced a decline of over 7% on Monday following a warning about delays in its electric vehicle (EV) rollout, which are expected to impact the company’s earnings in 2025. The German manufacturer noted a slowing demand for EVs amid its efforts to balance electrification with its traditional petrol-powered sports cars.
Shares of Volkswagen, Porsche’s parent company, also fell more than 7% on the same day after announcing substantial investments to revamp Porsche’s vehicle lineup. This situation underscores the difficulties facing European automakers as they contend with stiff competition from Chinese brands and a weakening economy that has reduced luxury car demand.
In a statement last Friday, Porsche adjusted its projected profit margin from a potential 7% to 2% or less. The company identified challenges such as U.S. import tariffs, a downturn in the Chinese luxury market, and a sluggish transition to electric mobility. As part of its strategy, Porsche indicated that it would delay the release of several new EV models and extend the production of combustion engine vehicles, despite impending European regulations set for 2035 that aim to ban the sale of new petrol and diesel cars.
In a notable shift, Porsche announced that a new series of SUVs originally designed to be fully electric will now be introduced exclusively with combustion engines and plug-in hybrid alternatives. Existing models like the Panamera and Cayenne will reportedly remain available with non-electric options for several more years.
Similar to Porsche, other luxury automakers like BMW and Mercedes-Benz are also implementing cost-cutting measures to remain competitive. The challenging environment, marked by aggressive pricing strategies from Chinese companies like BYD and XPeng, is exacerbated by a significant drop in average car prices in China over the past two years.
Source: https://www.bbc.com/news/articles/cdr6z6ryxv3o?at_medium=RSS&at_campaign=rss