Why Porsche Thinks Its Business Model Isn't Working Anymore

After several quarters of disappointing sales, mounting tariffs, and shifting market conditions, Porsche has announced a sweeping cost-cutting initiative.
Key Points
- Porsche’s worldwide deliveries dropped 6% in the first half of 2025, prompting the company to announce 1,900 job cuts and warn that its long-standing business model is no longer sustainable under current market conditions.
- CEO Oliver Blume confirmed that Porsche has abandoned its 80% EV sales target by 2030. Poor Taycan sales and shifting market sentiment have led the automaker to consider combustion versions of upcoming models originally planned as EV-only.
- While sales in China fell by a staggering 28% for a second straight year, North America showed a 10% increase in the first half of 2025—though rising prices and market volatility could challenge that growth moving forward.
The cracks have been appearing for months now, but this time, the German sports car maker is taking more drastic steps, including 1,900 job reductions by 2029, and backing away from its overly ambitious electrification goals.
While the world’s most iconic sports car brand has weathered market dips before, the current downturn appears more structural than cyclical. Porsche’s global sales dropped 3 percent in 2024, but that slide steepened in the first half of 2025, with deliveries down another 6 percent year-over-year.
Things have gotten so bad that Porsche CEO Oliver Blume was forced to admit the company’s long-standing business model “no longer works in its current form.”
In an internal memo sent to employees, which was originally seen by Bloomberg, Blume laid out the facts: weak demand in China, rising production costs, and new tariffs are squeezing margins and forcing Porsche to rethink its future.
“All of this is hitting us hard—harder than many other car manufacturers,” Blume admitted.
On the tariff front, it doesn't help that every single model Porsche sells in the United States is imported from the European Union—which is still without a solidified trade deal.
Porsche is also struggling with its transition away from internal combustion engines. The Boxster and Cayman—longstanding moneymakers in Porsche’s lineup—will end production in October, making way for all-electric successors that have been plagued with issues during development. Those cars aren’t expected until at least next year, or maybe even later.
Meanwhile, the Taycan, Porsche’s flagship EV, continues to struggle for sales. Last year's brutal 49 percent sales crash has been followed by another 6 percent slide in 2025 so far.
The new Macan EV is performing better out of the gate, but whether the upcoming all-electric Cayenne—expected to debut later this year—can turn the tide remains a question. The brand's ambitious target of having EVs make up 80 percent of global sales by 2030 has now been abandoned. Blume has publicly conceded the goal is “not realistic” under current conditions.
One relative bright spot for Porsche is the U.S. market, which remains the company’s largest. North American deliveries rose 1 percent in 2024 and jumped 10 percent in the first half of 2025 despite the new tariffs. But with recent price hikes of up to 3.6 percent across various models, that momentum may soon flatten.
Analysts warn that rising prices could erode the appeal of volume models like the Cayenne and Macan, even if buyers of high-end 911s aren’t as price-sensitive.
To address the worsening outlook, Porsche is now considering several stopgap strategies. A new gas-powered crossover, slotted between the Cayenne and Macan, is reportedly under consideration—but wouldn’t arrive before the end of the decade. The automaker has previously confirmed it would revive combustion engines for vehicles originally planned as EVs.
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An experienced automotive storyteller and accomplished photographer known for engaging and insightful content. Michael also brings a wealth of technical knowledge—he was part of the Ford GT program at Multimatic, oversaw a fleet of Audi TCR race cars, ziptied Lamborghini Super Trofeo cars back together, been over the wall during the Rolex 24, and worked in the intense world of IndyCar.
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Sounds like the EU Socialist’s need to make a deal. China is a lost mkt, but US is robust, growing and has a loyal fan base! Porsche makes big $$ certainly on the SUVs & 911 so build the SUVs in the States and absorb any tariffs on the 911.. also do not kill the Boxster Cayman, further develop it…