Porsche AG is adjusting its long-term corporate strategy to strengthen profitability, announcing plans to expand its lineup of combustion engine and plug-in hybrid models amid a slowdown in electric vehicle (EV) demand. The move signals a shift from the company’s previously ambitious electrification targets.
The German luxury carmaker, a subsidiary of Volkswagen Group (VOWG_p.DE), said on Friday that it expects sales of €39 billion to €40 billion ($42 billion to $43 billion) in 2025, with an operating profit margin of 10% to 12%, down from an estimated 14% in 2024. The company’s initial public offering (IPO) in 2022 set a medium-term profitability target of 20%.
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To counteract the weaker financial outlook, Porsche is implementing cost-saving measures and expanding its “special and exclusive manufactury” division, which focuses on high-margin customizations. The automaker will also increase investment in vehicle development and battery-related activities, forecasting an additional €800 million in expenditures this year.
“Porsche benefits from platforms and units that have already been developed,” a source told Manager Magazin, highlighting internal concerns within Volkswagen’s Audi unit, which may provide technical support for a potential combustion-powered version of the Macan SUV.
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Porsche’s decision to revisit combustion engine models follows delays in EV production, including setbacks with the electric Macan and the next-generation Boxster and Cayman. A final decision on a new combustion-powered Macan is pending, with a potential launch in early 2028.
Further details on Porsche’s revised strategy are expected when the company presents its full-year financial results on March 12.