economy
March 12, 2026
Porsche profits crash after costly EV strategy U-turn
German luxury carmaker Porsche AG has reported a dramatic drop in profits after overhauling its product strategy
TL;DR
- Porsche AG reported a nearly 93% drop in operating profits in 2025 due to approximately €3.9 billion in extraordinary expenses.
- The company abandoned its long-term EV platform development, incurring significant costs, and is returning to combustion-engine and plug-in hybrid models.
- Battery-related activities and US tariffs contributed substantially to the expenses.
- The profit drop has impacted parent company Volkswagen Group, which announced plans to cut 50,000 jobs in Germany by 2030, with Porsche facing around 3,900 job cuts.
- Porsche anticipates challenging market conditions, including pressure in China's luxury segment, intense price competition, geopolitical uncertainties, and US tariffs.
- Germany's auto sector faces broader challenges like surging energy costs, weaker demand, competition from Chinese manufacturers, and trade tensions.
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