Porsche shares plummet over 7% as EV rollout faces delays
What's the story
Porsche's shares plummeted over 7% on Monday, following a warning about delays in its electric vehicle (EV) rollout. The German automaker cited weakening demand as the reason for slowing its EV push. The announcement also affected parent company Volkswagen, whose shares also fell by more than 7%.
Financial impact
Porsche revises profit margin forecast
Porsche has revised its profit margin forecast from a maximum of 7% to 2% or lower. The company attributed this revision to several factors including US import tariffs, the Chinese luxury market downturn, and slower electric mobility adoption. In light of these challenges, Porsche announced it would delay the launch of its latest EVs while extending production of combustion engine models.
Strategy change
Strategy shift for Porsche
In a major strategy shift, Porsche has decided to launch an upcoming line of SUVs with only combustion engines and plug-in hybrids. This is despite the European market's 2035 deadline to ban the sale of new petrol and diesel cars. Existing models such as the four-door Panamera and Cayenne will continue to be offered with non-electric options until at least the 2030s.
Market competition
Price war in China's EV market
European automakers are facing stiff competition from Chinese brands such as BYD and XPeng. These companies are engaged in a price war in the domestic EV market. Many international carmakers have struggled to compete in China, where average car prices have dropped by an estimated 19% over the past two years to around 165,000 yuan ($23,000).