Published by Global Banking & Finance Review®
Posted on September 20, 2025
3 min readLast updated: January 21, 2026
Add as preferred source on GooglePorsche's EV rollout delay leads to a $6 billion loss for Volkswagen, driven by market challenges in China and the US, affecting profit outlooks.
By Thomas Seythal and Christoph Steitz
BERLIN/FRANKFURT (Reuters) -Porsche AG on Friday dialled back plans for its electric vehicle rollout due to weaker demand, pressure in key market China and higher U.S. tariffs, causing the luxury sportscar maker and its parent Volkswagen to slash their 2025 profit outlooks.
The move highlights the challenges for one of the most well-known car brands, which has been squeezed by its two most important markets - China and the United States - over price declines and trade barriers.
Volkswagen, Europe's top carmaker, said it would take a 5.1 billion euro ($6 billion) hit from the far-reaching product overhaul, which delays some EV models in favour of hybrids and combustion engine cars, at its 75.4%-owned subsidiary.
The changes are a major shift for the Stuttgart-based maker of the iconic 911 model, and are expected to hit Porsche's operating profit by up to 1.8 billion euros this year, it said.
SLOWER ELECTRIC VEHICLE MARKET LAUNCH
"We are seeing massive changes within the automotive environment," Oliver Blume, CEO of both Porsche and Volkswagen, told analysts and journalists in a joint call, citing a clear drop in demand for exclusive EVs.
"We have made key strategic decisions. Now it's time to put them into action. It's going to be a tough and long road, and it will demand our full focus and strong effort."
Porsche's Frankfurt-listed shares were down 3.1% at 1819 GMT, while Volkswagen's shares were 2.1% lower.
Porsche said it would delay the launch of certain all-electric vehicles, adding that the new SUV above the Cayenne model would initially not be offered as an all-electric vehicle, but with combustion-engine and hybrid models.
PROFIT MARGIN OUTLOOKS CUT
As a result, Porsche slashed its 2025 profit margin outlook to a maximum of 2% from 5-7% previously. It cut its midterm margin outlook to 15% at best from 15-17%.
"These are not margins that one would expect to see in a luxury product, at least not in a successful one," UBS analyst Patrick Hummel said during the call.
Porsche will extend the production period of currently available vehicle models with internal combustion engines (ICE) and hybrid drivetrains, including the Panamera, into the 2030s, Blume said.
Blume said he was counting on more flexibility in the European Union regarding Brussels' target of 100% reduction of CO2 emissions for new cars and vans by 2035.
Holding firm Porsche SE, Volkswagen's biggest shareholder, which also owns a 12.1% stake in Porsche AG, also cut its outlook for profit after tax, while Volkswagen cut its profit margin outlook to 2-3% from 4-5%.
US IMPORT TARIFFS NOT YET LOWER
Blume said a planned reduction of U.S. auto import tariffs to 15% from currently 27.5% could still take weeks as talks between Brussels and Washington over the issue are ongoing.
Volkswagen is in discussions with the U.S. administration over an investment package that Blume said could also cover Porsche, without being more specific.
($1 = 0.8510 euros)
(Reporting Christoph Steitz in Frankfurt and Thomas Seythal in Berlin; Additional reporting by Simon Ferdinand Eibach and Paolo Laudani in Gdansk; Editing by Jan Harvey and Richard Chang)
An electric vehicle (EV) is a type of vehicle that is powered by an electric motor instead of a traditional internal combustion engine, using electricity stored in batteries.
Profit margin is a financial metric that indicates the percentage of revenue that exceeds the costs of goods sold. It reflects a company's profitability.
Hybrids are vehicles that use two or more types of power, typically combining an internal combustion engine with an electric motor to improve fuel efficiency.
Explore more articles in the Finance category
