After signaling for years that its ultimate aim was to achieve an all-electric lineup, Porsche has revised its ambitions due to market realities. Rather than pursuing an 80% electric vehicle share by 2030, Porsche acknowledges that the transition to EVs is experiencing a slowdown. The sports car maker is reevaluating its electric-focused plan and exploring how to incorporate more combustion engines into its offerings, although this will be challenging.
Challenges in China
While the U.S. has been grappling with this situation for a while, Porsche’s significant challenge lies within the Chinese market. With a 35% decline in Taycan EV sales in China compared to the prior year, it has become evident that although the overall EV market in China is thriving, the high-end luxury sector—including the Taycan—is not keeping pace. To complicate matters, total Porsche sales, combining both ICE and EV models, have plummeted by 29% as of September.
Chinese EVs provide better value
This trend may be influenced by the rising availability of Chinese electric vehicles that deliver similar style and performance as the Taycan but at a much lower cost. Chinese consumers see no reason to opt for the high European price tag of a Taycan when there are domestic alternatives like the Xiaomi SU7 available. Trying to outdo Porsche, Xiaomi recently clocked a time of 6:46.87 for its SU7 Ultra Prototype around the Nürburgring Nordschleife, surpassing the Taycan Turbo GT’s best stock time of 7:07.55 by more than 20 seconds. The point is clear.
High-end buyers prefer ICE engines
Porsche has observed “…a clear trend in the premium luxury segment favoring combustion-engine vehicles.” This aligns with the sentiments expressed in our recent article titled “Do sports cars lose their souls when they lose their ICE engines?” Several exotic car brands have confirmed that they won’t abandon internal combustion engines, even as they add electric vehicles to their product lines.
Porsche may integrate ICE power into its EV platforms
With internal combustion engines reemerging for the foreseeable future, Porsche might consider redesigning its current electric-only platforms to accommodate ICE and hybrid powertrains if EV sales fall short of expectations. Meanwhile, existing internal combustion vehicles such as the gasoline-powered Macan, and likely the current Boxster and Cayman, will continue to be marketed in regions where they are favored, including the U.S.
Porsche’s ambitions for complete electrification are falling short of initial expectations. Like many manufacturers with proposed EV-heavy lineups, the ultimate decision rests with the customers. If customers favor internal combustion or hybrid vehicles, that’s what Stuttgart will deliver.
Porsche is undergoing significant changes to its electrification plans in response to declining Taycan sales and a persistent customer preference for traditional combustion engines. For a brand that previously appeared committed to electrification, this shift underscores Porsche’s understanding of its buyers’ desires and their reluctance to forsake classic powertrains.
The automaker has publicly opposed Europe’s proposed ban on combustion engines set for 2035 and is now investigating how to retrofit future vehicles originally designed as electric to accommodate hybrid powertrains. However, this will require substantial effort and funding, if it’s feasible at all.
The next-generation 718 Boxster and Cayman sports cars are fully electric, have been approved, and will launch soon. It’s conceivable that Porsche could backtrack and adapt them to include combustion engines, similar to what Fiat had to do with the 500e. Nonetheless, even if they approved such an initiative, it would take years before a re-engineered version would be on the road, assuming it’s even financially viable.
Another model originally designed as an EV that may be re-evaluated for combustion options is the flagship K1 SUV, which is expected to debut in 2028. The design and likely size of the three-row K1 suggest it has potential for hybrid adaptation.
Customer Demand Guides Strategy Shift
“A significant number of customers in the premium and luxury market are leaning toward combustion-engine vehicles; there’s a clear trend,” stated Porsche CFO Lutz Meschke during a conference call, elaborating on how the brand is responding to this insight. “We will update our combustion engine models, like the Panamera and Cayenne, and of course, we will continue to depend on plug-in hybrids,” Meschke added.
Flexible Production for a Diverse Lineup
“As for our electrified offerings, we have a lot of flexibility in our production capabilities. We can manufacture combustion engines, plug-in hybrids, and electrified cars on the same assembly line in Leipzig,” Meschke continued. “In terms of research and development, you’ll see greater adaptability in the coming years. We will create new combustion-engine variants [of our EVs] to better meet customer demand.”
Porsche initially aimed for 80 percent of its lineup to consist of electric vehicles (EVs) by the decade’s end. The remaining 20 percent would include the 911, which has recently introduced its first hybrid version, but was always expected to avoid fully-electric power until the 2030s. Porsche experienced early success with the Taycan and developed an electric Macan along with upcoming 718 EV models, envisioning these new models eventually replacing their older internal combustion engine (ICE) counterparts, initially offered alongside each other during a transition phase.
Sales Decline Poses Challenges for Porsche’s EV Ambitions
However, Taycan sales have plummeted this year, even with the launch of a refreshed model, especially in the previously lucrative Chinese market, while sales of combustion-powered 718 models have increased as customers seek them out before they are discontinued. Porsche’s operating profit fell by 26.7 percent to €5.5 billion ($5.95 billion) in the first three quarters of 2024 compared to the same period in 2023.
The next iteration of the Porsche 911 Turbo is set to debut next year and will utilize the same hybrid technology already present in the latest Carrera GTS, as confirmed by the company’s finance chief.
Deputy CEO and CFO Lutz Meschke informed the media that the Turbo variant of the updated 992.2-generation 911 will begin production in the second half of 2025. He also mentioned that it would be equipped “with the Varta cells on board,” referring to the German company that provides the 1.9 kWh batteries for the GTS’s hybrid system, a company that Porsche helped stabilize financially with a €60 million ($65 million) investment in August.
The 2025 GTS is not a plug-in hybrid electric vehicle (PHEV), cannot operate solely on electric power, and only marginally reduces CO2 emissions. However, it does deliver a 54 horsepower (54 PS) increase through a motor integrated into the mandatory eight-speed dual-clutch transmission, which powers an electric turbocharged unit that shortens the time from acceleration to maximum torque from two seconds to just half a second.
Porsche engineered a new 3.6-liter flat-six engine for the 2025 GTS that utilizes a single large turbocharger (as lag is no longer a concern) and achieves a total power output of 532 horsepower (540 PS) and 449 lb-ft (609 Nm) of torque.
This performance puts the GTS remarkably close to the 2025 Turbo, which remains unchanged and produces 572 horsepower (580 PS), or 640 horsepower (650 PS) in Turbo S form. Insights suggest that the 2026 Turbo will feature a more powerful variant of the GTS’s powertrain, and it is likely that even the standard Turbo will exceed 600 horsepower (608 PS).
Meschke also disclosed during the media call that production for the Carrera S will start in the first half of 2025. Similar to the base Carrera, which debuted alongside the GTS in May, the Carrera S will not incorporate any hybrid technology and won’t see significant technological updates.
The Carrera received a modest power increase, from 379 horsepower (385 PS) to 388 horsepower (394 PS) thanks to a pair of larger turbochargers carried over from the previous GTS, and the S, which previously generated 443 horsepower (450 PS) before its discontinuation at the end of the 2024 model year, is anticipated to produce around 454 horsepower (460 PS) for 2026.
Although the slight power bump may underwhelm some, the introduction of a manual transmission for the first time in a 992.2 will likely offset that disappointment. The base Carrera and GTS hybrid models do not offer a manual option. It is important to note that the dates mentioned by Meschke regarding the S and Turbo relate to the start of production, which means there is a chance both models could be revealed much sooner. “The mix for the 911 will be quite satisfying next year,” Meschke stated. We share that belief.
In 2022, Porsche announced that it aimed for 80% of its new deliveries to be battery electric vehicles (BEVs) by 2030, pledging to transition several of its most favored models to electric power.
Due to declining electric vehicle sales and diminishing customer interest, Porsche is now revising its strategy, with Meschke indicating to Automotive News Europe that there is a significant chance that future pure electric models will also be available with a combustion engine or hybrid variant.
Meschke elaborated in an interview after the release of the German brand’s third-quarter earnings, which showed that sales of the all-electric Taycan had dropped by 50% compared to the preceding quarter, stating, “What is clear is that we are sticking with the combustion engine for much longer.”
Recently, Porsche confirmed that the V8 petrol engine used in its most powerful Cayenne and Panamera models will continue to be produced “well into the 2030s,” while future models that were once anticipated to be BEVs (Macan, Boxster, and the upcoming Cayman) are becoming increasingly likely to incorporate combustion engines soon.
Porsche CFO Lutz Meschke remarked during a conference call last month, “A lot of customers in the premium and luxury segment are looking in the direction of combustion-engined cars; there’s a clear trend.”
The latest Macan is unlikely to feature a combustion engine in its current form since it has been developed on the Premium Platform Electric (PPE), which is designed specifically for electric vehicles.
Similarly, significant investments have gone into ensuring that future Boxster and Cayman models will also be built on the same platform, although Meschke mentioned that the company remains “very flexible” and that the production facility in Leipzig, Germany, can produce a range of options, including combustion engines, hybrids, and electrified vehicles.
Porsche is not the only prominent car manufacturer to reverse its intentions regarding an expanded electric vehicle lineup. Earlier this year, Ford infamously canceled plans for a new version of the F-150 Lightning in the US, stating that it wanted to concentrate on hybrids, which it claims are more popular among consumers.
As a result, the Blue Oval has also reduced production of its Explorer and Capri EV models in Europe due to falling sales, leading to significant layoffs and redundancies among its workforce. This has prompted some industry observers to speculate that Ford might eventually cease selling passenger vehicles in Europe, shifting to focus on commercial vehicles instead.
In addition to these trends affecting BEVs, Dan Balmer, the new boss of Lotus Europe, recently informed Auto Express that the company’s newly introduced ‘Hyper Hybrid’ system would provide customers with an “EV-centric driving experience” while maintaining the security of a petrol engine for longer trips.
Following its acquisition by the Chinese-owned Geely Holding Group, the British sports car manufacturer has emphasized the significance of electric vehicles in its lineup, which currently includes only the Emeya and Eletre models as pure battery EVs.
At this moment, there is no indication of which models will be the first to feature Lotus’s ‘Hyper Hybrid’ system, but the adaptability of its Electric Premium Architecture does not rule out the possibility of incorporating a combustion engine into those previously mentioned pure EVs.
Recently, Bentley also extended its timeline for phasing out the combustion engine by five years, now targeting 2035 for the transition. In parallel, Volvo expressed intentions for “90 to 100 percent” of its global sales to be electrified by the end of the decade, with plug-in hybrids still firmly on the agenda.
Some car manufacturers genuinely understand that the future, regardless of how it unfolds, will rely much less on internal combustion engines. Others need to be pushed into this transition or will take any chance to avoid it. This is not surprising; shifting long-established businesses rich in engine expertise to a focus on batteries and software is quite challenging. Not every company or leadership team is equipped to handle this change.
However, Porsche appears to be an exception. In an interview with Germany’s Automobilwoche, cited by Reuters today, a board member reiterated plans to cease production of the gasoline-powered Macan crossover and to transition the successors of the Boxster and Cayman to fully electric models as well.
According to the report, Porsche executive board member Albrecht Reimold stated that the petrol variant of the SUV model Macan for non-European markets would be phased out by 2026 at the latest. “The platform has reached the end of its cycle,” Reimold noted. Production of combustion engine versions of the Boxster and Cayman sports cars, part of the 718 series, will conclude next year, and the company is already concentrating on electric versions set to debut next year, Reimold added.
As I mentioned when the Macan EV was first introduced, making such an important model fully electric required both courage and intellect. The Macan is a significant revenue generator for Porsche, and betting on battery power represents a considerable risk. While the sales of the 718 twins are not as robust as the original Boxster was back in the 1990s, these entry-level sports cars remain favorably regarded and integral to the lineup. By committing to electrifying these models, Porsche is making a serious statement. Yet, given the vastly improved 2025 Taycan—and the original model was quite impressive as well—Porsche appears genuinely dedicated to this direction.
That said, it is much more hesitant to go all-electric with the 911, so much so that it is pioneering e-fuels in an effort to maintain some form of internal combustion. However, the new 911 is also a hybrid, indicating that Porsche has some intriguing developments planned for that model.
Regardless, Porsche’s actions demonstrate that not every so-called “legacy” automaker is becoming apprehensive, even if global EV sales experience fluctuations as anticipated.
60%: China’s Geely is ‘Facing Challenges Across the Board’ Due to New Tariffs
A hot summer of tariffs is upon us, everyone. The U.S. initiated new 100% tariffs on China-manufactured EVs, and the European Union is now imposing similar penalties. Both global powers are concerned about the potential influx of inexpensive Chinese EVs into their markets, threatening local manufacturers—although this remains a distant possibility in the U.S., it’s currently unfolding in Europe.
As of now, Geely Group seems to be the company most adversely affected by these new tariffs. I refer to Geely as a sort of “stealth player” because it owns a vast selection of prominent brands like Volvo and Lotus, alongside newer ventures like Polestar and Zeekr. Yet, many are unaware of their Chinese origins. Moreover, owing to all these acquisitions, Geely has established EV manufacturing capabilities worldwide.
Geely had evidently intended to introduce China-made EVs to its other markets, but these new tariffs are disrupting those plans. The Volvo EX30 has already been postponed in the U.S. by a year as it needs to switch production to Belgium, but other models within the Geely family are similarly impacted.
Most likely, Geely will need to concentrate on increasing local production in markets outside of China or in nations that are politically friendlier, like South Korea. However, this presents its own challenges:
“For Chinese manufacturers, they essentially have two long-term options,” Zhang said. “They can either keep exporting from China to the EU while adjusting prices for the higher tariffs, or they can ramp up production in Europe, which is also more costly than in China.” Ultimately, it boils down to a cost-assessment to determine which route is more profitable, he mentioned.
Geely isn’t just eyeing global aspirations; it’s already operating on that level. Yet, this growing anti-China sentiment means it needs to devise a backup plan for numerous models.
High-silicon electrodes represent a breakthrough in battery technology that could lead to enhanced range and quicker charging. We may soon witness some tangible products utilizing these batteries, as reported by The Information’s Steve LeVine today:
Sila Nanotechnologies and Group14 Technologies claim they are on the verge of commencing high-volume commercial shipments of their competing silicon electrodes. Sila’s CEO, Gene Berdichevsky, mentioned that within a year, the company would start delivering commercial-grade silicon anodes to four clients, including Mercedes-Benz, Panasonic (which manufactures batteries for Tesla and other EV producers), and two other automotive firms.
Sila, based in California, will produce the anodes at a gigafactory it is constructing in Moses Lake, Washington. Meanwhile, Group14, located in Woodinville, Washington, plans to deliver silicon anodes to three undisclosed EV and battery customers by year’s end from a gigafactory being built in partnership with battery manufacturer SK On in South Korea.
Mercedes is the only car manufacturer that has publicly stated its plans to utilize such anodes. A representative from Mercedes informed me that the company will provide Sila’s electrodes as an option in its ultra-luxurious G-Class SUVs around the midpoint of this decade, although they did not specify an exact year. Renault might follow suit: In a recent interview, Philippe Brunet, the senior vice president of EV and powertrain for Ampère, Renault’s parent company, mentioned that the French automaker intends to implement silicon anodes in the coming years, but he did not disclose the identity of the supplier.
The article indicates that while the entire industry is striving for more affordable, “sufficient” batteries—think LFP—these silicon-anode batteries might initially be sold at a higher price, which explains Mercedes’ eagerness to adopt them:
Recently, car manufacturers have made it clear that their primary concern is cost. Berdichevsky and Luebbe assert that they can compete with graphite, but they also seem to seek a premium price due to the superior performance of their anodes. It’s not surprising that the first commercial vehicle to utilize these anodes will be a high-end Mercedes. Berdichevsky pointed out that consumers are willing to pay more for the iPhone compared to most other brands because many perceive it as a superior product. Both he and Luebbe contended that automakers are likely to charge higher prices for vehicles that can travel further and charge more quickly due to their anodes. “They can command a significant premium because charging anxiety is the top barrier to EV adoption at the moment,” Luebbe remarked.
