The German carmaker saw its shares decline over 7% by Monday afternoon. Shares in Volkswagen — the firm’s biggest shareholder — also fell.
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Porsche’s share price slid over 7% on Monday afternoon after the firm slashed its profit outlook and postponed the rollout of an electric range.
Shares in Volkswagen, Porsche’s largest shareholder, were also down over 7% on Monday afternoon.
Porsche made the announcements on Friday, warning that the EV pivot would dent its operating profits by €1.8 billion this year.
It forecast a positive return on sales of up to 2%, down from a previous range of 5 to 7%. The announcement marked the fourth time this year the carmaker has lowered its guidance.
Porsche said that its new SUV series, previously intended to be all-electric, would “initially be offered exclusively as a combustion engine and plug-in hybrid model due to market conditions”.
The firm added that a new software platform for EVs, planned for the 2030s, would also be delayed. Simultaneously, Porsche’s existing combustion engine models will remain available for a longer period.
The Volkswagen Group, parent company of Porsche, said in a separate statement that it expected a €5.1bn hit to its operating profits this year because of Porsche’s poor performance.
Challenges for the industry in Europe
Europe’s carmakers are struggling with lacklustre demand for their EVs as Chinese competitors continue to lead on innovation and price, partly thanks to generous subsidies from Beijing.
Adding to their woes is an economic slowdown in China, denting consumer appetite in Asian markets, paired with vacillating political support for EVs in Europe.
Some firms, including VW, are hoping that the EU will allow for some flexibility on its pledge to ban combustion engine cars from 2035. On the other hand, a lack of clarity over this deadline, along with the rollback of consumer subsidies, is making it hard for companies to plan and make investment decisions.
Along with these challenges at home, proposed 15% tariffs from the Trump administration threaten to squeeze margins on EU exports to the US.
At the end of September, Porsche will leave the DAX, Germany’s leading stock index, after a dramatic slide in its share price. The firm’s stock has fallen over 30% this year.
In order to plug losses, the company is looking to cut jobs. In March, Porsche said it would axe around 1,900 posts by 2029 through natural turnover, restrictive hiring, and voluntary agreements. The company added that another 2,000 jobs would be lost through the expiration of fixed-term employment contracts.
