Porsche under pressure: Electrification strategy sparks crisis
Porsche, known for its thrilling sports cars, has been focusing on electromobility in recent years. Until recently, the brand aimed for an 80 percent share of electric vehicles in total sales. However, ambitious plans come with challenges.
Porsche is currently experiencing difficulties. The brand, considered one of the most profitable players in the market, is facing increasing challenges, such as declining sales, high tariffs, and growing competition. So, what went wrong?
Experts cited by "Automotive News Europe" report that Porsche is paying the price for its aggressive and inflexible electromobility strategy. Fabio Hölscher, an analyst from "Warburg Research," even suggests 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 anticipated, Porsche now has to develop additional combustion engine models. Compounding these issues are the weak situation in China and uncertainty in the US market.
In February, Porsche laid off 1,900 employees in its research and production departments, citing the "pace of electromobility development." According to "Automobilwoche," the sales revenue targets for 2025 have been reduced by about 2 billion euros, putting an additional 8,000 jobs at risk.
As if the weakening demand for electric vehicles weren't enough, there is also strong competition from China. Porsche's sales in the first quarter there fell by 42 percent compared to the same period last year.
Is there a chance to reverse this situation? For now, there are noticeable personnel changes. Michael Steiner, former head of development at VW Group, recently assumed the role 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.
