Porsche Accelerates Development of New Compact SUV Featuring Gasoline and Hybrid Powertrains | Carscoops

      Declining sales, reduced profits, and a smaller than anticipated EV market are prompting Porsche to invest more in new combustion models.

      7 hours ago

      by Chris Chilton

      Porsche’s CEO has reaffirmed the commitment to creating more combustion vehicles.

      While EV sales are robust, the market is expanding at a much slower pace than expected.

      The new ICE Macan is on the way, and the K1 super-SUV may offer both combustion and electric options.

      A lot has changed for Porsche since its stock market debut in 2022, and it's not just the share price, which has dropped to less than half its highest value. Sales have also declined, along with confidence in the electric-centric future model strategy Porsche implemented prior to the IPO. Now, the company's leader acknowledges that it was a mistake to move away from combustion engines, and he is taking measures to correct this error.

      Related: Porsche May Announce A New Macan ICE As Soon As March

      Perhaps "mistake" is too strong a term. Porsche developed an EV-focused product strategy, which involved phasing out the combustion 718 twins and Macan in favor of electric versions, based on market signals indicating ongoing growth in EV sales and strong performance in China. The signals weren't misinterpreted; they simply turned out to be inaccurate.

      After Sales Decline, Strategy Adjustment

      “We continue to face significant challenges globally,” CEO Oliver Blume admitted while Porsche announced its half-year results, showing a 6 percent drop in total sales and a staggering 67 percent decrease in profit. “This is not a temporary storm. The world is changing dramatically, and particularly, differently than expected just a few years ago,” he further commented.

      However, it’s worth noting that Porsche’s EVs have not failed substantially. Taycan sales were strong until recently, and the new Macan Electric has been quite popular. More than one-third of all Porsches sold in Europe are fully electric, and half of Macan buyers—Porsche’s top-selling model—opt for the electric version.

      This gives the brand a larger share of the electric segment compared to some competitors, but the slower-than-expected growth in the EV market—especially in the US, where growth seems to be stalling—means that segment is smaller than anticipated.

      New ICE Macan Successor Expected by 2028

      Part of Blume’s strategy to stabilize the company involves increasing focus on traditional combustion models. "A more balanced drivetrain portfolio starting in 2028 will improve market positioning and support sustainable long-term growth,” stated Blume.

      The company is not abandoning EVs by any means, as the Macan Electric will now also have an unplanned ICE variant. When questioned during the H1 2025 Earnings Call about the ICE Macan successor, Blume disclosed that it would be launched no later than 2028.

      “It won’t be beyond 2028. We’re working on a compact SUV with both ICE and hybrid versions,” he said. "And as we indicated for the end of the decade, there will be a global rollout in all markets. We are accelerating the process with very quick development times, creating a very distinctive Porsche for this segment, which will also be different from the BEV Macan. We believe that, especially for SUVs now, we'll have a highly flexible product lineup between Macan and Cayenne across all drivetrain options.”

      Our sources recently caught a test model for Porsche’s compact ICE SUV, concealed under a modified Audi Q5 body.

      One detail Blume did not clarify is whether the new combustion-powered compact SUV will keep the Macan name or launch under a new name, which could indicate how closely Porsche wants to associate the two models or how much separation it prefers.

      Additionally, the Cayenne will feature a selection of electric and combustion engines, and the electric K1 super-SUV, expected late in the decade, may now also offer an ICE option, according to Automobilwoche.

      The 718 Boxster and Cayman, said to be postponed until 2027 due to the issues with battery supplier Northvolt, might also merit an ICE option, but it remains uncertain if that will be the case.

      Global Challenges Beyond Powertrains

      Increasing the production of combustion vehicles won't solve the sales issues in China, where deliveries have declined by 28 percent this year and may not fully recover, nor will it address President Trump's new 15 percent tariffs on Porsche imports to the US from Europe. Job cuts and price increases are being used to mitigate the financial repercussions of these challenges faced at the Stuttgart headquarters.

      Aside from slightly elevated prices, however, this upheaval and the resulting expanded vehicle and powertrain choices can be viewed positively by Porsche buyers.