Porsche's Challenging Year May Just Be Beginning Following a Decline in Sales in China | Carscoops

      Deliveries in China plummeted by 42 percent, and Porsche was affected by its decision to alter its battery strategy.

      April 29, 2025, 07:13

      By Chris Chilton

      Porsche's profits fell by 40.6 percent in the first quarter of 2025, dropping to €0.76 billion.

      Overall global deliveries decreased by 7.9 percent to 71,470, with sales in China experiencing a steep decline of 42 percent.

      The company has revised its 2025 outlook, partially due to the adverse effects of U.S. tariffs.

      Porsche is facing challenges, as its profits in Q1 declined by 40.6 percent, dropping from €1.28 billion to just €0.76 billion ($1.46 billion to $0.87 billion), according to newly released financial reports. Revenue decreased by 1.7 percent to €8.86 billion ($10.1 billion), and the return on sales fell significantly from 14.2 percent to 8.6 percent during a time when global deliveries dropped by 7.9 percent to 71,470.

      Porsche had already disclosed the sales downturn earlier in April, with data indicating a significant impact in China, where deliveries fell by 42 percent, and Europe saw a 10 percent decline (including a staggering 34 percent drop in Germany). In contrast, U.S. sales increased by 37 percent; however, this performance in North America wasn't sufficient to counter the downturn in other regions.

      The automaker attributed its profit decline to “ongoing economic and political challenges,” along with ongoing investments and changes within the company. One such investment, finalized in March, involved Porsche acquiring a majority stake in V4Smart, a battery manufacturing subsidiary of Varta, which will produce cylindrical lithium-ion cells for Porsche's electric vehicles. Porsche previously stepped in to support Varta, which manufactures batteries for the 911 GTS Hybrid, when it encountered difficulties last year.

      In other battery-related developments affecting Porsche’s profitability, the company has abandoned plans to expand high-performance battery cell production with Cellforce Group, a joint venture between Porsche and Customcells. This decision was influenced by slower-than-anticipated growth in electric vehicle sales and has contributed to an increase in special expenses from €800 million to €1.3 billion ($911 million to $1.48 billion).

      These additional costs, together with a grim outlook in China and the implementation of U.S. import tariffs, have compelled Porsche to revise its expectations for 2025. The company now projects the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin to be between 16.5-18.5 percent, down from the previous estimate of 19-21 percent, factoring in the impact of tariffs for April and May only.

      Due to the unpredictable nature of the tariff situation, Porsche is unable to ascertain the potential impact for the remainder of the year. However, the company recently refuted claims that it had ceased shipping cars to the U.S. in response to President Trump's new import levies.