Finance
Porsche slashes outlook as US tariffs, China slump dim prospects
Published by Global Banking & Finance Review®
Posted on April 28, 2025
4 min readLast updated: January 24, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on April 28, 2025
4 min readLast updated: January 24, 2026
Porsche cuts its outlook due to US tariffs and a slump in China, affecting margins and investor confidence.
By Christoph Steitz
FRANKFURT (Reuters) - Porsche's margins plunged in the first quarter, the sportscar maker said on Tuesday, forcing it to cut its outlook due to weakness in its key market China, a slowing shift to electric cars and U.S. tariffs that are disrupting the global car industry.
Like other European carmakers, Porsche has been dealt a severe blow by the tariffs, which are expected to raise car prices by thousands of dollars and rattle an automobile sector already struggling with high costs and intensifying competition.
With no U.S. production, Porsche is heavily exposed and along with a 25% plunge in its share price year-to-date it has suffered a loss of investor confidence since it was listed by majority-owner Volkswagen in 2022.
Analysts, during a call discussing a first-quarter margin drop to 8.6% from 14.2%, repeatedly asked finance chief Jochen Breckner on how he intended to restore trust, also citing a number of warnings over the past 18 months.
"It increasingly just feels like every time you meet with your supervisor board the situation gets incrementally worse than what you feared, on multiple levels," Tim Rokossa of Deutsche Bank said.
Patrick Hummel of UBS also called for a quick management board reshuffle, hinting at Oliver Blume's dual role as Porsche and Volkswagen CEO that has for years drawn the ire of investors.
Breckner said that tariffs resulted in a hit of at least 100 million euros ($114 million) in April and May, but added that the carmaker had so far taken not raised prices but will do so if duties remain in place.
"We see a very special and challenging situation," Breckner said, citing falling demand and fierce competition in China, a slower-than-expected transition to EVs and U.S. tariffs.
He said localising production in the United States made no sense at the moment due to Porsche's low vehicle sales figures, even if the group were to team up with another VW brand.
CHINA WOES
Shares in Porsche were down 6.4% at 1012 GMT, at the bottom of Frankfurt's blue-chip index.
In April, Porsche said it had shipped added inventory to the United States to get ahead of tariffs.
It said late on Monday that the tariffs, in place since April at 25%, weighed on its business and that its adjusted outlook did not factor in their future effects beyond May.
Porsche said it now expects revenue of between 37 billion euros ($42.1 billion) and 38 billion euros in 2025, down from its previous forecast of 39 billion to 40 billion euros. Its profit margin is forecast to drop to 6.5-8.5%, down from a previous forecast of 10-12%.
According to the average of analyst estimates in an LSEG poll, Porsche's operating margin is seen at 9.7% on revenue of 38.8 billion euros.
Porsche also said it would no longer pursue plans to expand high-performance battery production at its Cellforce subsidiary, and it cited a decline in demand in China for all-electric luxury cars.
"We believe ... the firm is taking the opportunity to kitchen sink estimates," JP Morgan analysts said.
The car maker, which at its stock market debut in 2022 had a higher valuation than its parent company Volkswagen AG, has fallen from grace, struggling in particular with low sales in China, which fell 42% in the first quarter.
Bill Russo, CEO of Shanghai-based advisory firm Automobility, said Chinese customers of electric cars had been drawn to domestic brands because of their improved technological offering.
"No foreign company believed that the Chinese could somehow build equity that was superior to the foreign brands, especially the Europeans."
($1 = 0.8772 euros)
(Reporting by Gnaneshwar Rajan in Bengaluru, Tom Sims and Christoph Steitz in Frankfurt, Victoria Waldersee in Stuttgart and Amir Orusov in Gdansk; Editing by Sonali Paul, Muralikumar Anantharaman, Susan Fenton, Sherry Jacob-Phillips and Kim Coghill)
The article discusses Porsche's reduced outlook due to US tariffs and a slump in the Chinese market.
US tariffs have increased costs, leading to a potential rise in car prices and a negative impact on Porsche's margins.
Porsche faces declining demand and increased competition in the Chinese market, impacting its sales and revenue.
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