Porsche CEO Warns Business Model Fails Amid China Sales Drop, U.S. Tariffs

Porsche is facing significant challenges as sales decline, particularly due to weak demand for electric vehicles in China and the impact of U.S. tariffs under the Trump administration. CEO Oliver Blume has acknowledged in multiple internal memos that the company's longstanding business model is no longer sustainable, leading to plans for extensive cost-cutting measures and workforce reductions, including up to 1,900 job cuts by 2029. Despite North America being Porsche's largest market with some sales growth, pricing pressures and global market conditions have forced further price increases that could dampen future demand. The company is delaying the release of new electric models like the battery-powered Cayman and Boxster, and its original EV, the Taycan, has seen steep sales declines. Porsche’s goal of having 80% of its sales be electric vehicles by 2030 is now uncertain, reflecting the broader challenges in balancing regulatory demands with profitability amid intensifying competition and geopolitical pressures. These factors have led Porsche to negotiate with labor unions for additional cost reductions to protect profit margins amid a turbulent market environment.