Porsche has postponed the release of several upcoming EV models, a move that Volkswagen, its parent company, estimates will result in a $6 billion hit to future profits.
The German luxury automaker has confirmed that its upcoming SUV, internally referred to as the K1 and positioned as the successor to the Cayenne, will not debut as a fully electric model. Instead, the K1 will feature a combination of a traditional combustion engine and a plug-in hybrid system. This decision comes as the company reevaluates its strategic direction in response to declining sales and mounting market challenges.
Porsche has acknowledged that its revised strategy will lead to a decline in its projected profit margins, with parent company Volkswagen estimating a $6 billion drop in earnings for 2025. The shift stems from Porsche’s assessment that demand for fully battery-electric vehicles is growing more slowly than anticipated.
As a result, the brand will continue manufacturing its current combustion-engine models, such as the Cayenne and Panamera, with future iterations featuring a mix of petrol and hybrid systems. Additionally, the next-generation EV platform, originally slated for a launch in the 2030s, will now undergo a full redesign in partnership with other Volkswagen Group brands.
Oliver Blume, CEO of both Porsche and the Volkswagen Group, stated that the automotive industry is undergoing a significant transformation, and in order to adapt to evolving market conditions and shifting customer expectations, the company must undertake a comprehensive realignment.
Porsche has faced overall sales declines this year, particularly in regions like Germany and China, where EV demand is surging. However, the drop has been primarily due to reduced sales of its combustion-engine models. In contrast, sales of Porsche’s electrified vehicles have increased.
Porsche Cayenne pointed to several key factors behind its strategic pivot, including ongoing tariff tensions with the U.S., a shrinking share of the Chinese luxury market, and rising competition from Chinese electric vehicle manufacturers.
In response to these shifting market dynamics, Porsche has adjusted its full-year outlook. The company now expects sales revenue to remain between €37 billion ($43.46 billion) and €38 billion ($44 billion).
However, its operating profit margin has been revised down to 2%, a notable drop from earlier estimates of 5% to 7%. Similarly, the Volkswagen Group has revised its 2025 profit margin forecast to between 2% and 3%, down from the previously projected range of 4% to 5%.
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