Porsche announces changes to its electrification plans, with a slower-than-expected uptake of all-electric models prompting a rethink of key investments.
The German automaker confirms it will no longer expand its in-house battery production independently through its Cellforce subsidiary. The decision marks a clear shift in Porsche’s original product strategy and comes just months after it secured a majority stake in V4Smart, a joint venture with German battery specialist VARTA.
Porsche says it plans to redirect investment into a broader product and software offensive. The move, made public in an updated 2025 financial forecast released Tuesday, hints at a renewed focus on internal-combustion-engine (ICE) models as well as electrified derivatives of existing models, rather than an all-out expansion of dedicated electric models.
Porsche reported a 1.7% decline in group revenue for Q1 2025 to €8.86 billion ($9.45 billion). More concerning, however, was its group operating profit, which dropped a significant 40.6% to €760 million ($810 million).
Expenses linked to the change in plans – including the battery program retrenchment – have been raised from €800 million ($853 million) to €1.3 billion ($1.39 billion). About €200 million ($213 million) has already been deployed in the first quarter of 2025 on various projects, according to Porsche’s chief financial officer, Jochen Breckner.
“We are investing in the future of Porsche – in products, software and measures with which we want to strengthen the company sustainably,” he says.
The change of course follows a challenging start to 2025 for Porsche, with deliveries in China, its largest single market, falling 42% year over year.
The first sign of a shift in Porsche’s electrification plans came in June 2024, when it confirmed the upcoming fourth-generation Cayenne would be produced in both ICE and all-electric forms. The Cayenne is Porsche’s global top seller, and it makes sense to have both versions so as not to alienate customers.
Shortly afterward, word leaked of Porsche’s intention to return an ICE version of the Macan to its lineup.
Nevertheless, electrification remains central to Porsche’s future model strategy. All-electric and plug-in hybrid models accounted for almost 40% of its global deliveries during the first quarter of 2025, led by the newly launched second-generation Macan EV and the updated Cayenne E-Hybrid. Porsche still expects all-electric models to make up more than 20% of its total sales this year, with more electric models on the way.
Alongside the new Macan, an electric-powered successor to the 718 Boxster and Cayman is currently in the final stages of development, while the next Cayenne is set to be launched in 2026. Porsche is also working on a new flagship electric SUV, known internally as the K1 and positioned above the Cayenne.
