Porsche AG Advances Strategic Realignment to Drive Future Growth

Porsche Launches Strategic Overhaul Amid Profit Slump

Porsche AG is accelerating its strategic realignment in response to mounting global challenges, unveiling sweeping changes to safeguard profitability and resilience after a sharp drop in earnings in the first half of 2025.

The German sports car maker reported group sales revenue of €18.16 billion, down 6.7% from the previous year. Operating profit fell dramatically to €1.01 billion from €3.06 billion, bringing the operating return on sales to just 5.5%, compared to 15.7% in the same period last year.

CEO Oliver Blume pointed to a confluence of global pressures—including slumping luxury demand in China, steep US import tariffs, and slower-than-expected EV adoption—as key factors behind the downturn. “The world is changing dramatically. That’s why we are fundamentally developing Porsche,” said Blume, emphasizing that a revamped product lineup is already resonating with customers and could spark renewed growth by 2026.

To adapt, Porsche has begun a major corporate overhaul, incurring special charges totaling approximately €1.1 billion in the first half of the year. These include €500 million linked to its battery operations, €200 million for restructuring, and €400 million due to price protection efforts for US customers affected by new tariffs. A second package of measures, to be negotiated with employee representatives later this year, is expected to bolster long-term earnings and cash flow.

CFO Dr Jochen Breckner stressed the need for a leaner, more agile company. “The aim of our strategic realignment is to strengthen our profitability and resilience,” he said. Despite the turbulence, Porsche reaffirmed its full-year sales forecast of €37 to €38 billion and adjusted its profitability outlook to reflect new tariff realities. Depending on economic conditions, return on sales is expected to land between 5% and 7%.

In terms of vehicle deliveries, Porsche shipped 146,391 units globally in the first half of the year, a 6.1% decrease. Electrified vehicles made up 36.1% of those deliveries, with Europe leading at 57%—exceeding IPO targets. The Macan remained the top seller, with nearly 60% of units sold now fully electric.

Meanwhile, Porsche’s battery subsidiary V4Smart ramped up its second production line in Nördlingen, establishing one of Europe’s only facilities for high-performance lithium-ion round cells.

Despite the financial pressures, Porsche excelled in other arenas. It topped the J.D. Power APEAL customer satisfaction study in the US and captured both the team and manufacturer titles in Formula E. At Le Mans, the Porsche 911 GT3 R secured another class victory, while the Porsche 963 finished second overall.

As the company presses ahead with its transformation, Porsche is banking on the strength of its brand and product appeal to weather volatility and emerge more resilient in a reshaped automotive landscape.