Tariffs, Low EV Demand, And Slow China Sales Hitting Porsche Hard, Says CEO

Porsche has joined the ranks of European carmakers already suffering the financial impact of the Trump administration’s auto tariffs, and, according to an internal memo, could begin another round of cost-saving measures later this year. In reports relayed by Bloomberg and based on internal communications to employees of the German brand, the US tariffs, lower-than-expected demand for its Taycan and all-electric Macan, and a drop in sales in China were arguably hitting the German brand harder than any of its rivals.

Though no further information regarding a revised business model has been released, it’s likely Porsche will follow up planned 3,900 job cuts by 2029 with further cost-saving measures to redress profit margins:

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Since none of its line-up is built in the US, and there are no plans for that to change any time soon, Porsche has already confirmed that MSRPs across its US lineup will rise, for the second time this year, in a bid to offset tariff-related costs. It’s potentially troublesome ground, given that prices for its most affordable model, the 718 Cayman, brush perilously close to the $73,000 mark. On the other end of the spectrum is the Cayenne Turbo GT – Porsche’s most affluent model – costing $210,600. The brand could also choose to delay some of its upcoming projects: the more fuel-efficient six-stroke engine, sadly, could be a prime contender. The all-electric 718 Cayman/Boxster has already been bumped to 2027.

It’s also possible Porsche could take a leaf from parent company Volkswagen’s book and begin streamlining production costs in Germany in a bid to protect profit margins (VW is already looking to reduce headcount by 35,000 over the next five years). It’s been said that Porsche is targeting an operating margin of between 15% and 17% in the short-to-long term, up from 8.6% in Q1.

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Porsche’s EV Sales Are Also Down

Ironically, after achieving record sales in 2024, Porsche’s sales rose by just over 11%, year-to-date, according to the brand’s Q2 financial report. Sales of the 718 Cayman/Boxster, in particular, were up nearly 75 percent as Porsche’s highest-growth model ahead of the Panamera, though the fact that this is the last year for both probably had a lot to do with that. Sales of the all-electric Taycan, meanwhile, rose only 1.4% so far, the lowest of Porsche’s line-up (yes, that includes the Black Edition). Globally, the Taycan has also struggled in China – the brand’s second-biggest market – where the luxury electric market is particularly strong, thanks to an influx of Chinese-built luxury EV sedans and SUVs from the likes of Zeekr and Nio.

Porsche is far from the only manufacturer to be struggling with tariff-related losses, of course. This week, General Motors recorded a massive 35% drop in net income as a direct result of the Trump administration’s tariffs, equating to $1.1 billion loss.

Source: Automotive News, via Bloomberg