Change of Course
It turned out that Porsche’s aggressive transition to the world of electric vehicles did not pay off as the company had hoped. The automaker was forced to admit that its serious investments in electrification, and then a sudden change of course, punched a hole of 1.8 billion euros in its operating profit. Investors reacted instantly, and Porsche’s stock in Frankfurt fell by almost 9.3 percent, marking the sharpest intraday drop since its high-profile IPO in 2022.
Earlier this week, Porsche made a sudden, but not unexpected, statement that its new flagship off-roader, known under the codename K1, would be introduced not as a fully electric model as initially planned, but would debut with internal combustion engines and hybrid powertrains. The company also confirmed that the top versions of the new generation 718 Cayman and Boxster models would be offered with ICE, despite the fact that the new models were initially developed exclusively as electric vehicles.
This step is intended to stabilize margins, but it also makes it clear that the brand’s previous electric strategy was too costly and did not meet the actual demands of its customers.
Stock Plunge
Following the news of the sharp change in plans, the value of Porsche’s stock in Germany fell by almost 9.3 percent and has decreased by almost 30 percent year-to-date. The decline this year has been so severe that the company was removed from the German benchmark DAX index. Furthermore, Porsche has already been forced to lower its profit forecasts four times this year alone.
The consequences will also be felt by the entire VW Group. According to data, the sports car manufacturer’s parent company will suffer a non-cash impairment of 3 billion euros due to Porsche’s decision, which will force it to lower its operating return on sales forecast from a possible 5 percent to a level between 2 and 3 percent.
Analysts’ Doubts
Auto analyst Matthias Schmidt stated that buyers
“place little value on luxury electric cars”
, which explains Porsche’s return to high-margin ICE models. Citi analyst Harald Hendrikse was even more direct, noting that
“Porsche has been disappointing investors for over two years. It is difficult to conclude that these disappointments have now ended.”
The situation is so complex that VW Group and Porsche CEO Oliver Blume faces growing pressure to relinquish his position as head of Porsche, allowing someone else to lead the company’s recovery process. It is reported that the search for a new Porsche CEO has already begun, with the Porsche-Piech families negotiating with potential candidates.
The events surrounding Porsche clearly demonstrate a broader trend in the automotive industry, where excessive optimism about a rapid transition to electric power is colliding with market reality. Buyers in the premium segment do not seem ready to completely abandon traditional engines, especially in such iconic models associated with driving pleasure and emotion. This situation is forcing other manufacturers to also reconsider their strategies, balancing between innovation and the conservatism of their customer base. Porsche’s future will now depend on how quickly and effectively the company can adapt to the new conditions without losing its identity.