Porsche shares plunged more than 7% on Monday after the company announced delays in its electric vehicle rollout, warning that earnings for 2025 would be affected. The German carmaker said it would slow its EV expansion as global demand weakens. Shares of its parent company Volkswagen also dropped by over 7% after confirming it would spend billions to overhaul Porsche’s lineup. The announcement has fueled concerns among investors about the automaker’s growth strategy.

The setback highlights the challenges faced by European carmakers caught between electrification targets and maintaining their petrol-powered heritage. Porsche said on Friday it had cut its projected profit margin from as high as 7% to as low as 2%. It cited U.S. import tariffs, shrinking demand in China’s luxury car market, and a slowdown in the EV ramp-up as key hurdles. The warning marks one of the sharpest outlook revisions for the company in recent years.

As part of its revised strategy, Porsche confirmed it would delay the launch of its newest electric models. Instead, the company plans to extend the production of combustion engine cars, even as Europe edges closer to its 2035 ban on new petrol and diesel vehicles. Industry groups have been lobbying European regulators to ease emissions targets, arguing they are unrealistic in the current market. The delays suggest Porsche is prioritizing stability over speed in its EV rollout.

The company also revealed that its upcoming line of SUVs, originally planned as fully electric, will now debut with combustion and plug-in hybrid engines. Current models such as the Panamera and Cayenne will continue to be sold in non-electric versions well into the 2030s. This represents a major shift from Porsche’s earlier pledge to aggressively move toward electrification. Analysts say the shift may help the company manage costs but risks losing ground in the EV race.

The broader luxury car market is under pressure, with rivals BMW and Mercedes-Benz also cutting costs to keep pace. Chinese automakers like BYD and XPeng have intensified competition, driving down prices in the global EV market. Average car prices in China have fallen 19% in two years, making it harder for European brands to compete. Porsche’s latest announcement signals a retreat from its earlier EV ambitions, despite having unveiled its first electric concept, the Mission E, ten years ago.

Source: BBC.