Faced with a decline in sales of its electric vehicles, German automaker Porsche plans to extend the development of combustion-engine models. According to Lutz Meschke, Porsche's chief financial officer, this decision responds to increased demand for combustion engines in the luxury vehicle segments.
EV sales in freefall
In the first nine months of 2024, the share all-electric vehicles held in Porsche's total sales fell to 7.3 percent, compared to 12 percent in the same period in 2023. The Taycan, which has served as the spear point and emblem of Porsche's electric transition, has seen its sales collapse, particularly in China, where the brand's overall sales have fallen by 29 percent.
The downward trend is also evident in Europe and the United States, regions that are considered favourable to the electric transition.
An expanded range of ICE models
In response, Porsche plans to develop new versions of the Cayenne and Panamera models. These models will meet specific needs depending on the region. Porsche is even considering equipping some future electric models with a hybrid or combustion engine.
At the same time, the newly launched electric Macan replaces its combustion equivalent in Europe, while the gasoline version remains available in other markets.
A high-end electric SUV still in preparation
Despite this rebalancing, Porsche maintains its electric ambitions with the development of a large 100-percent electric SUV. Known by the code name K1, it will sit above the Cayenne in the lineup and is mainly intended for the Chinese and American markets. It will likely be built on the Volkswagen Group's SSP Sport platform.
A reduced Chinese network
The sales drop in China is also leading Porsche to downsize its dealer network. The objective is to adjust operations to more realistic volumes, around 60,000 vehicles per year, compared to 100,000 previously.
Growth prospects in 2025
Porsche is banking on a recovery in its electric sales starting in 2025, with the arrival of a redesigned version of the Taycan and of the electric Macan. The brand will also introduce a hybrid variant of the 911 (992.2), a symbol of its mixed strategy.
Despite a decline in its operating margin in the third quarter of 2024 (10.7 percent compared to 17 percent in the previous quarter), Porsche remains confident. Improved sales in the fourth quarter should allow it to achieve an annual margin of 14 to 15 percent, with a long-term target of 20 percent.