Porsche AG said on Friday it will delay parts of its electric vehicle rollout, citing weaker demand, trade pressures in China and higher tariffs in the United States, prompting both the luxury brand and its parent Volkswagen to cut their 2025 profit outlooks.
Volkswagen, which owns 75.4% of Porsche, said it would take a €5.1 billion ($6 billion) charge linked to a wide-ranging product overhaul. The shift prioritizes hybrids and combustion-engine cars over some electric models. Porsche said the change could reduce its operating profit by up to €1.8 billion this year.
Porsche plans to postpone launches of several all-electric vehicles, including a new SUV positioned above the Cayenne, which will now initially be offered with combustion and hybrid drivetrains. The company also intends to extend the production life of existing internal combustion and hybrid models, such as the Panamera, into the 2030s.
“As we see massive changes within the automotive environment, we have made key strategic decisions,” CEO Oliver Blume told analysts and reporters on a joint call. “It’s going to be a tough and long road, and it will demand our full focus and strong effort.”
The Stuttgart-based carmaker lowered its 2025 profit margin outlook to a maximum of 2% from a previous target of 5–7%. Its midterm target was also revised to as much as 15%, down from 15–17%. Volkswagen cut its group profit margin guidance to 2–3% from 4–5%, while holding firm Porsche SE, its largest shareholder, also reduced its profit forecast.
Porsche shares in Frankfurt were down 3.1% at 1819 GMT, while Volkswagen shares fell 2.1%. Analysts warned that the outlook was unusually weak for a luxury manufacturer. “These are not margins that one would expect to see in a luxury product, at least not in a successful one,” said UBS analyst Patrick Hummel during the call.
Blume added that he was counting on more regulatory flexibility in the European Union as the bloc moves toward its 2035 target of a 100% reduction in CO2 emissions for new cars and vans. He also noted that a planned reduction of U.S. import tariffs from 27.5% to 15% could still take weeks as negotiations continue between Brussels and Washington.
Volkswagen is in talks with the U.S. administration over an investment package, which Blume said could also include Porsche.
Source: Reuters
