Porsche Faces a Slowdown: Criticism Rises Amid Shift to Electric
Porsche is experiencing a slowdown, leading to criticism during the recent shareholders’ meeting. Shareholders have raised concerns about the brand’s rapid shift towards electric vehicles.
The 2023 Porsche general assembly was disrupted by environmental activists. To prevent a repetition of this incident, the manufacturer opted for a remote AG this year. Despite being held virtually, the event was lively.
In 2023, Porsche’s sales only grew by 3.3%. However, in the first quarter of 2024, sales dropped by 4%, with a 23% decline in North America and a 24% drop in China. The situation in China is concerning, especially as local customers are showing interest in high-end Chinese vehicles.
In 2023, Porsche reported a 7.7% increase in revenue (reaching 40.5 billion euros), with an operating margin of 18%. However, the margin is expected to decrease to between 15 and 17% this year. Meanwhile, the stock price has dropped by 30%.
This situation has stirred discontent among shareholders. Criticisms have been directed at CEO Oliver Blume, who manages both Porsche and the Volkswagen group. Some argue that Blume’s dual role indicates he is not fully dedicated to Porsche, which is deemed inappropriate for a publicly traded company. The high average age of the board of directors has also been highlighted.
Concerns have also been raised about Porsche’s electric vehicle targets. The brand aims to achieve 80% of its sales with 100% electric vehicles by 2030. Some view this goal as overly ambitious and a too rapid shift, especially given the recent sluggish electric vehicle sales.
There are fears that Porsche may lower prices in certain markets to meet its targets. This trend is already evident in China, where independent dealerships have been forced to reduce prices to clear inventory.
This year, Porsche is launching a new all-electric Macan, which will be the only model available in Europe starting this summer. The previous model will be discontinued due to new regulations in Europe, posing a risky move.
Despite the challenges, Oliver Blume remains optimistic, emphasizing the wealth of new launches in 2024 with five major releases. He points out that sales typically decrease temporarily with each model launch before picking up. Therefore, 2024 is a pivotal year before a new rise in results.
Moreover, Porsche is committed to electric vehicles and will introduce a new all-electric Boxster in 2025, followed by an electric Cayenne in 2026.