Porsche has announced a significant shift in its electric vehicle (EV) strategy, delaying the launch of several new battery-powered models and extending the production life of combustion and hybrid vehicles well into the next decade.
The decision comes as the German automaker grapples with weakening global demand for luxury EVs, escalating U.S. tariffs, and mounting competition in China.
The Stuttgart-based automaker confirmed that a new SUV series positioned above the Cayenne, originally slated to debut as a fully electric lineup, will instead launch with combustion engine and plug-in hybrid options only. In addition, popular models such as the Panamera and Cayenne will continue to be offered in both hybrid and traditional powertrains through the 2030s, marking a clear rollback from earlier electrification commitments.
The realignment comes at a steep cost. Porsche warned it expects up to €1.8 billion (C$2.9B/US$2.1B) in operating profit losses this year tied to its revised EV rollout plans. As a result, the automaker slashed its 2025 return-on-sales outlook to a maximum of 2%, down from a previously projected 5% to 7%. Its automotive EBITDA margin forecast was also reduced to between 10.5% and 12.5%, compared to an earlier range of 14.5% to 16.5%.
Parent company Volkswagen AG, which holds a 75.4% stake in Porsche, said the changes will weigh heavily on its own financial results. Volkswagen now anticipates a €5.1 billion (C$8.2B/US$5.9B) hit in 2025, lowering its expected profit margin to between 2% and 3%, compared with its prior forecast of 4% to 5%.
CEO Oliver Blume, who leads both Porsche and Volkswagen, acknowledged the challenges during a joint call with analysts. “We are seeing massive changes within the automotive environment. We have made key strategic decisions. Now it’s time to put them into action. It’s going to be a tough and long road, and it will demand our full focus and strong effort,” he said. (via Reuters)
Despite the pullback, Porsche still plans to invest up to €1.8 billion (C$2.9B/US$2.1B) in developing its next-generation EV platform. However, the company is betting that offering more flexibility with hybrids and combustion engines will help maintain profitability during what it describes as a challenging transition period.
This is not the first time Porsche has adjusted their EV strategy. Last year the German automaker said it would integrate internal combustion engines and hybrid engines into models initially designed as pure EVs.
