Asger Risom
Porsche’s profit warning and EV delay have shaken the auto sector, wiping billions from its value and dragging Volkswagen and rivals down.
Porsche’s profit warning and EV delay have shaken the auto sector, wiping billions from its value and dragging Volkswagen and rivals down.
A Profit Warning That Shook the Sector
Porsche shares plunged 6.82% after announcing delays to its upcoming electric SUV and a major financial hit. Volkswagen, which owns 75% of Porsche, saw its stock drop 6.81% in immediate response.
Billions in Losses and a Shift in Strategy
Porsche’s decision to expand its combustion and hybrid lineup led to a €1.8 billion operational loss and a €3 billion impairment. The company slashed its sales return forecast from 5% to as low as 2%.
A Crisis Years in the Making
This is Porsche’s fourth profit warning in 2025 alone. Once a rising star on the stock market, it’s now expected to exit Germany’s DAX index after losing half its value since its 2022 debut.
China and the U.S.: The Twin Pressure Points
Weak demand in China and heavy U.S. tariffs are squeezing German automakers. Local Chinese brands now dominate their domestic EV market, while U.S. protectionism limits German access.
Volkswagen Feels the Fallout
Volkswagen, already under pressure to cut costs, now faces deeper struggles. Its premium brands—once profit lifelines—are also suffering, with Bentley, Lamborghini, and Ducati lowering forecasts.
Germany’s EV Dream on Hold
Despite leading Europe in EV production, the German industry is now backpedaling. The luxury segment, long seen as resilient, is no longer immune to the realities of shifting global demand.
A Domino Effect Across Europe
Mercedes-Benz fell nearly 3%, BMW 2.19%, and Stellantis 2.92% following the news. The Porsche shock has exposed sector-wide vulnerabilities in Europe’s industrial core.
Structural Weakness in German Manufacturing
According to Commerzbank, car output in Germany is still over 10% below pre-pandemic levels. Major automakers and suppliers have responded with sweeping job cuts.
China’s Growing Competitive Edge
Chinese carmakers are ramping up exports of both EVs and combustion models to Europe, often bypassing tariffs and undercutting local prices, putting German firms in a defensive position.
A Crisis Far From Over
With high labor costs, dwindling demand, and increasing foreign competition, Germany’s industrial heart is cracking — and the transition to electrification remains incomplete.
This article is made and published by Asger Risom, which may have used AI in the preparation
