Over the past few years, several automakers have stepped forward to share their views on the profitability of electric vehicles compared to gasoline-powered models, and specifically the former may outpace the latter. At GM, for example, CEO Mary Barra has already put forward the year 2023 as the tipping point.
With prices of all sorts of materials and components on the rise, that timeline may no longer be in play, but overall most industry players believe it’s inevitable that, one day, it will be possible to make as much profit from the sale of an electric model as from one with a combustion engine.
Porsche is of the opinion that within two years, the production costs of EVs should drop enough for profit-margin parity between those types of vehicles and ICE models. This opinion came straight from the mouth of Porsche CFO Lutz Meschke at the company's Capital Markets Day last week.
He went even further, adding that this won't necessarily be reflected in the price of Porsche's electric vehicles, as “buyers are willing to pay more for new tech.”
If the production costs are the same, but EVs sell for more than equivalent gas-fed vehicles, it stands to reason that profit margins will be higher. “Our target is to selectively expand higher-margin segments and to leverage electric-vehicle pricing opportunities,” Porsche CEO Oliver Blume told investors.
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By the end of the decade, Porsche expects 80 percent of its vehicles to be electric. For those who remain skeptical this can be achieved, we refer you to this fact: the Taycan outsold the 911 last year. Consumers are ready in this category, it seems clear.
Porsche intends to increase the return on sales and has set a goal of boosting profit margin from the 16 percent it was last year to over 20 percent this year. Historically, Porsche has had notably high profit margins. In 2017, it raked in $17,250 on the sale of each vehicle, on average. For comparison, we're talking about $5,000 at BMW and Mercedes-Benz in the same period, reports The Drive, picking up a story from Bloomberg.
Porsche recently confirmed that it will develop and launch a new electric SUV and that it will be positioned above the Cayenne in the lineup. The Macan will also go electric, but it will be for the year 2024, as the project has been pushed back a year due to a delay in development.