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Porsche AG and its parent company, Volkswagen AG, have lowered their earnings forecasts, citing delays in the rollouts of electric vehicles amid weakening demand. Porsche stated that its operating return on sales for 2025 will not exceed 2%, compared to a previous target of 5% to 7%. The revision marks the fourth time this year the sports-car maker has cut guidance. Its American depositary receipts (ADR) slid 6.4% following the announcement.
The company disclosed a €1.8 billion ($2.2 billion) hit to operating profit from postponing new EV launches. A key shift includes scrapping plans for an all-electric SUV positioned above the Cayenne; instead, the model will be offered only with combustion and hybrid powertrains. Porsche has also abandoned a plan to produce its own batteries, citing weaker-than-expected EV demand.
The retreat highlights the broader industry challenges, with European carmakers grappling with a slowdown in EV sales despite years of heavy investment. Porsche’s troubles have been compounded by sluggish demand in China and tariffs in the US, eroding the share price to levels that will see it drop out of Germany’s DAX benchmark index.
In response, Porsche is pushing more combustion-engine and plug-in hybrid models, cutting costs through layoffs, and revamping leadership. Several executives have already been replaced, and CEO Oliver Blume — who also heads Volkswagen — faces growing pressure from investors to step aside from his Porsche role. Bloomberg reported last month that the Porsche-Piëch family has begun looking for a new leader.
The brand also scaled back its medium-term profitability goal, trimming its margin target to 15% from a previous upper limit of 17%.
Volkswagen, meanwhile, lowered its forecast for operating return on sales to 2–3% from as much as 5%, and warned of a roughly €3 billion non-cash impairment tied to Porsche’s restructuring. VW’s US-listed shares dropped 4.5% after the guidance cut.
Also Read: Automotive sector under GST 2.0: What buyers need to know about car price changes
The company disclosed a €1.8 billion ($2.2 billion) hit to operating profit from postponing new EV launches. A key shift includes scrapping plans for an all-electric SUV positioned above the Cayenne; instead, the model will be offered only with combustion and hybrid powertrains. Porsche has also abandoned a plan to produce its own batteries, citing weaker-than-expected EV demand.
The retreat highlights the broader industry challenges, with European carmakers grappling with a slowdown in EV sales despite years of heavy investment. Porsche’s troubles have been compounded by sluggish demand in China and tariffs in the US, eroding the share price to levels that will see it drop out of Germany’s DAX benchmark index.
In response, Porsche is pushing more combustion-engine and plug-in hybrid models, cutting costs through layoffs, and revamping leadership. Several executives have already been replaced, and CEO Oliver Blume — who also heads Volkswagen — faces growing pressure from investors to step aside from his Porsche role. Bloomberg reported last month that the Porsche-Piëch family has begun looking for a new leader.
The brand also scaled back its medium-term profitability goal, trimming its margin target to 15% from a previous upper limit of 17%.
Volkswagen, meanwhile, lowered its forecast for operating return on sales to 2–3% from as much as 5%, and warned of a roughly €3 billion non-cash impairment tied to Porsche’s restructuring. VW’s US-listed shares dropped 4.5% after the guidance cut.
Also Read: Automotive sector under GST 2.0: What buyers need to know about car price changes
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