Porsche sees market value cut in half amid billions in EV losses

• Porsche is facing financial struggles due to significant losses on its EV investments. Its profit margin is projected to drop to 10%, well below the 20% target set during its 2022 IPO.
• The company’s stock has fallen 8%, hitting a post-IPO low, and its market value has been cut in half since 2023, prompting concerns from analysts.
• In response, Porsche is reinvesting in gasoline-powered vehicles, while projected EV losses have risen to $3.6 billion.

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Porsche is dealing with financial difficulties after reporting billions of dollars in losses on its electric vehicle (EV) investments. The automaker’s profit margin is projected to drop as low as 10% this year, significantly below the 20% target management had outlined ahead of its initial public offering (IPO) in 2022.

How is the stock market reacting to the news?

On Friday, Feb. 7, Porsche’s stock fell by as much as 8%, reaching a new low since its IPO. The company’s market value is now half of what it was in 2023.

Bernstein analyst Stephen Reitman has characterized this development as a “sharp deterioration,” calling it a “major concern.”

How have EVs contributed to Porsche’s problems?

This financial strain follows Porsche’s decision in 2024 to scale back its transition to EVs, citing lower-than-expected demand. Some of the company’s electric models have reportedly lost nearly 50% of their value within the first year of being sold.

To address these challenges, Porsche plans to reinvest in adding more gasoline-powered options to its lineup, a move the company said will contribute to a financial hit of about $831 million in 2025.

Additionally, the automaker’s holding company has increased its projected losses from its EV investments. The previous low-end estimate of slightly over $1 billion in December has now risen to as much as $3.6 billion.

What happens next?

As a result of these difficulties, industry experts anticipate that several top executives at Porsche may soon depart, including the company’s Chief Financial Officer Lutz Meschke, Sales Chief Detlev von Platen and CEO Oliver Blume.