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BERLIN — When Porsche unveiled its first full-electric sports car in 2019, the company bet that the Taycan would win over die-hard fans and expand the storied brand’s reach into a still untapped market of climate-conscious, fast-driving enthusiasts.
Judging by the rough ride the Taycan has had, Porsche’s experience shows that it is not a given that the brand capital amassed over decades in the world of combustion engines can be easily transferred to the world of electric vehicles.
Slowing EV sales, heightened competition in core markets, including China and the U.S., and nagging problems with quality have weighed on Taycan sales — which fell 49 percent in 2024 — and Porsche’s business overall, raising doubts about the company’s shift to electric cars and hybrids.
Investors, who thought Porsche could be the next Ferrari, have lost faith. Porsche shares are down more than 30 percent since the company’s 2022 initial public offering.
Maybe the recent upgrade of the Taycan, which has garnered accolades from critics, could help Porsche fulfill its mission of “making electricity more electrifying.” But the Stuttgart-based Volkswagen Group subsidiary is taking no chances.
Porsche is hedging its electric bet with a new plan to invest the equivalent of about $870 million to develop new models with internal combustion engines. Despite CEO Oliver Blume’s insistence at the company’s news conference March 12 that “the future is electric,” he said Porsche would offer gasoline-powered cars “well into the 2030s.”
Porsche’s operating profit plunged 23 percent last year to about €5.6 billion ($6.1 billion), while global sales fell 3 percent to 310,718, driven by a 28 percent decline in China. Porsche and other German premium automakers have yielded their dominance in China to homegrown manufacturers such as Xiaomi, which makes the SU7, a Taycan look-alike that rivals the luxury sedan’s software features and performance at roughly half the price.
Fixing China is going to be difficult for Porsche, which needs to maintain six-figure pricing in a market where intense competition is driving down prices.
Blume said China has undergone a structural shift with the growth of EVs and economic turbulence dampening consumer spending.
“For Porsche,” he said, “one thing is clear: We are not going to wage a war over prices and discounts.”
Instead, Porsche will invest more in its brand heritage and sacrifice volume to maintain price levels. Blume added that the automaker may not achieve past sales levels in China anytime soon.