Porsche’s once-celebrated shift toward electric vehicles (EVs) is losing momentum as the German automaker faces a significant drop in demand for its high-end Taycan sedan.
What was once a shining example of EV innovation is now the latest victim of cooling consumer interest in luxury electric models. In response, Porsche has scaled back its ambitious electrification plans and renewed its commitment to internal combustion engines (ICE).
That’s because Taycan sales have plunged by 50% year-over-year in the first nine months of 2024, with only 14,000 units sold globally by September.
The decline has forced Porsche to offer steep markdowns on remaining inventory, including USD$22,500 discounts on the 2024 model. Even with these incentives, the car remains the most expensive alternative fuel vehicle to own, according to iSeeCars research, due to high depreciation and maintenance costs.
It also means existing owners are being brutalized on the resale market, being forced to offer their lightly used cars for a fraction of what they paid for them.
To add insult to injury, Porsche owners in Europe were notified last week of a recall to fix an issue with the high-voltage battery modules that could cause fires.
The Taycan in particular was to be the flagship of Porsche’s new all-electric line with performance specs to boot — it tops out at 313 km/hr and carries a hefty sticker price of CAD$135,600.
But during a third quarter sales call, Porsche admitted its electrification strategy is faltering. The automaker, once committed to an 80% electric fleet by 2030, has walked back that target and is now focusing more on combustion-engine derivatives of hybrid vehicles to address waning demand for fully electric models.
The retreat from a full EV transition comes as Porsche struggles to maintain its market share in China, where luxury EV demand has plummeted harder and faster than traditional markets in Europe and North America. The company’s market capitalization has shed over USD$30 billion since April, with investors growing wary of Porsche’s future compared to rivals like Ferrari and BMW.
Porsche is not alone in reconsidering its EV strategy. The broader luxury auto market is facing fierce competition from Tesla and Chinese automakers, whose aggressive pricing and faster innovation cycles have left European brands scrambling to keep up.
Ford, GM, Mercedes, Jaguar — even Austin Martin — have all delayed or cancelled ambitious new manufacturing facilities outright.
The Volkswagen Group, which owns Porsche, has been particularly impacted by the ongoing price war and has been forced to shut down entire factories in its home country of Germany for the first time in its history.
Part of Porsche’s hesitation to commit to full electrification lies in its faith in synthetic e-fuels, which could help prolong the life of internal combustion vehicles. Porsche’s R&D head, Michael Steiner, emphasized the company’s ongoing investment in e-fuels, which could potentially replace fossil fuels in existing cars.
“The new Cayenne will be fully electric,” Steiner said in a recent interview with Autocar, “but we’ll produce an ICE version in parallel. It’s the same for the Panamera.”
Despite these adjustments, Porsche is still planning to transition the 718 Cayman and 718 Boxster to fully electric models by 2025. However, the strong sales performance of those gas-powered sports cars — up 10% year-over-year despite being discontinued in parts of Europe — demonstrates that consumer interest in traditional vehicles remains “robust,” the company said.