Porsche has entered a period of sharp downsizing due to falling sales and declining profits. The German automotive giant has decided to close three subsidiaries. This decision also represents a significant step back in the company's investments in electric vehicles and technology.
The battery plan has been shelved.
The most notable company to close was Cellforce Group, which worked in the battery sector. Porsche had previously promoted this company with the goal of producing its own batteries. However, last year it abandoned this plan and relegated Cellforce to a purely research and development role.
Now, instead of developing its own battery, Porsche will rely more heavily on external partners. The company's newly announced strategy shows a significant weakening of its goal of independence in the electric vehicle sector.
The e-bike and software divisions are also shutting down.
Porsche is not just shutting down its battery division. Porsche eBike Performance, which develops electric bike ride-on systems, and Cetitec, a software company that also serves the Volkswagen Group, will also cease operations.
These three closures mean that more than 500 employees will lose their jobs.
Tough decisions from the new CEO.
Porsche CEO Michael Leiters, who took office at the beginning of the year, said the company needs to return to its core business. The goal is to make Porsche faster, simpler, and stronger again.
During this process, the company began to exit its side projects. Porsche recently sold its shares in Bugatti Rimac and the Rimac Group.
Taycan started strong, but the momentum didn't continue.
Porsche made a strong entry into the electric vehicle market in 2019 with the Taycan. However, its continuation wasn't as strong as expected. The launch of the Macan Electric was delayed by almost two years. One of the main reasons for the delay was Volkswagen's problems on the software development side.
This process slowed down Porsche's electric vehicle transformation.
Sales are falling in many markets.
Porsche's problems aren't limited to the production side. The company's sales have also declined in many key markets.
North American sales fell 11 percent. Deliveries in China declined 21 percent. In Europe, sales decreased by 18 percent.
The situation in China is particularly noteworthy. In a country where electric vehicles are strong in the market, Porsche's decline shows that the problem is not just about EV demand.
Internal combustion engines have regained importance.
Porsche had at one point planned to shift a large portion of its sales to electric vehicles. However, recent developments have led the company to refocus on internal combustion engine platforms.
This doesn't mean abandoning electric vehicles entirely. Porsche is preparing to launch the all-electric Cayenne this year. Additionally, the gasoline-powered Macan will gradually be phased out.
A critical period for Porsche.
The closure of Cellforce clearly demonstrates the magnitude of the shift in Porsche's electric future plans. The company is now struggling with both declining sales and a change in its technology investment strategy.
In short, Porsche is now focused not just on growth, but on making tougher decisions to survive.
