How Porsche Is Quietly Rethinking Its Electric Turn

After a forced march toward electrification, the VW Group and its brands, Porsche foremost among them, are going through a period of major turbulence. The reasons include US tariffs, China that is no longer buying much at German prices, and margins on electric vehicles that often fail even to cover manufacturing costs. According to reports from the AFP and Reuters news agencies, Volkswagen Group CEO Oliver Blume is said to have authored an internal memo warning that between 50,000 and 100,000 jobs could be eliminated, alongside the possible closure of four German plants in Hanover, Zwickau, Emden and Neckarsulm — something unprecedented in the company’s 87-year history. On July 27, Porsche management and its unions jointly announced the elimination of a further 5,000 positions at the Stuttgart-Zuffenhausen headquarters and the Weissach development centre, bringing the total number of jobs cut since 2025 to 8,900, or roughly one-fifth of the automaker’s workforce.

To finance this restructuring plan, Wolfsburg is reportedly looking to its Italian assets. According to the Financial Times, a separate IPO of Lamborghini is being considered, following the model used for Porsche in 2022, while keeping the brand within the group. Ducati, meanwhile, could be sold outright. Bentley is also undergoing a slimming-down programme: the Crewe-based marque has announced 275 job cuts, once again citing the collapse in Chinese demand and US tariffs. And last April, the Bugatti chapter was brought to a close, with Porsche selling its entire stake in Bugatti Rimac (45%) and Rimac Group (20.6%) to a consortium led by US investment firm HOF Capital.

A longstanding source of profitability for the VW Group, Porsche AG’s operating profit plunged by 92.7% in 2025, from €5.64 billion to just €413 million. Its automotive operating margin fell to 1.1%, compared with more than 14% a year earlier. In China, long the brand’s growth engine, deliveries fell by 26% in 2025 and then by a further 32% in the first half of 2026, to 14,501 units — a volume now lower than in Germany. This is unprecedented for Porsche in what was once its largest market, as Chinese consumers turn away from European models in favour of domestic manufacturers, including in the premium segment, where local vehicles are often better equipped and significantly cheaper.