Porsche blaming electrification strategy for deepening crisis

Porsche cut 1,900 research and manufacturing jobs across its German facilities in February.

Things aren’t going the best for Porsche in recent times. Although it was recently considered among the world's most profitable automakers based on percentage, the carmaker has been facing dropping sales, steep tariffs and EV competition from China. Its new electric models, like the electric 718 Boxster and Cayman, are also delayed.

According to a new media report, Porsche’s overly aggressive electrification strategy is to blame. The report cites Fabio Hölscher, analyst at Warburg Research, saying Porsche's goal of going 80 percent electric worldwide by 2030 is the main cause of its issues. 

“Because the battery electric adoption is behind schedule, Porsche now has to develop additional combustion models on top of dealing with the costly delays in BEV ramp-up, as well as managing the weak situation in China and uncertainty around U.S. exports," Hölscher said. He also added that things would have been better if Porsche had adopted “a more flexible production approach," with more plug-in hybrids and shared platforms, similar to what BMW did.

Then there is the stiff competition it is facing from China. Porsche's first-quarter sales there fell 42 percent compared to the same period last year. The brand’s CEO hinted at a total market exit, seeing the situation. The performance EV in China has surged as well, with cars like the Xiaomi SU7 Ultra and Yangwang U9 offering crazy horsepower figures and active suspension tech at relatively affordable prices.

Porsche cut 1,900 research and manufacturing jobs across its German facilities in February, citing a "delayed ramp-up of electromobility." There has also been a shake-up in its executive team. Michael Steiner, former VW Group development boss moving to deputy chairman of Porsche's executive board. At the end of February, Porsche replaced its finance and sales bosses, too.

It remains to be seen what path Porsche charts for the future. As it stands, the delay in new electric models, tough economic scenario and relentless competition from China certainly won’t make things easier for the manufacturer from Stuttgart.

Source: Inside EVs