porsche's electric ambition sparks challenges amid market shift
Porsche, renowned for its thrilling sports cars, has clearly been focusing on electromobility in recent years. Until recently, the brand aimed for an 80 percent share of electric vehicles in total sales. Unfortunately, ambitious plans come with a price.
Porsche is currently not having a good run. The brand, considered one of the most profitable players in the market, has to face increasingly bigger problems, such as declining sales, high tariffs, and growing competition. What went wrong?
As reported by experts cited by "Automotive News Europe," Porsche is paying the price for its aggressive and inflexible electromobility strategy. Fabio Hölscher, an analyst from "Warburg Research," goes even further, openly stating that the goal of achieving 80 percent electrification is at the root of the brand's problems.
Since the adoption of electric vehicles is not progressing as quickly as expected, Porsche now has to develop additional combustion engine models. On top of all this, there is the weak situation in China and uncertainty around the U.S. market.
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In February, Porsche laid off 1,900 people in its research and production departments, citing the "pace of electromobility development." As reported by "Automobilwoche," the sales revenue targets for 2025 have currently been reduced by about $2.9 billion CAD, putting an additional 8,000 jobs at stake.
As if the weakening demand for electric vehicles wasn't enough, there is also strong competition from China. Porsche's sales in the first quarter fell there by 42 percent compared to the same period last year.
Is there a chance to change this situation? For now, there are visible personnel changes. Michael Steiner, the former head of development at VW Group, recently moved to the position of deputy chairman of Porsche's executive board. At the end of February, Porsche also replaced its heads of finance and sales. It seems that a new strategy is unavoidable.
