Porsche is changing course.
The German luxury automaker has confirmed it will continue developing and producing gasoline-powered cars well into the 2030s, driven by difficult electric vehicle (EV) sales, falling demand in China, and global trade tensions.
This is a strategic pivot for a brand that had heavily promoted its electric future, led by models like the Taycan and Macan EV.
Now, Porsche is investing €800 million to develop a new generation of combustion engines, according to reporting from Automotive News.
“It’s about keeping our core products strong and competitive for years to come,” Porsche executives said during their recent earnings call.
One of the key factors behind the shift is flagging demand in China, Porsche’s largest global market. EV sales have cooled significantly there, with the Taycan in particular struggling—including sharp depreciation in the used car market, with some models reportedly losing considerable value within just 28 days.
Meanwhile, intense competition from domestic Chinese automakers is pressuring Porsche’s margins and forcing a reassessment of its all-electric strategy.
In the U.S., where Porsche is also raising prices, the company is preparing for potential punitive tariffs on European car imports amid escalating trade tensions.
“When the topic becomes concrete, we will consider what pricing options there are to pass this on to consumers,” said CFO Jochen Breckner, noting they hope for a “reasonable” tariff system to emerge.
Uncertainty over tariffs has already impacted Porsche’s revenue outlook.
The automaker now expects a profit margin of just 10–12% per car in 2024, compared to a previous target of up to 19%.
Despite tightening margins, Porsche is planning several new product launches, including an updated 911 model and a possible new SUV line by the end of the decade—both likely to feature internal combustion engines (ICE) or plug-in hybrids.
While EVs remain part of Porsche’s lineup, the company is now clearly signaling that gasoline engines will remain a pillar of its identity for at least another decade.
The €800 million investment will not shield Porsche from broader financial restructuring. According to news reports, the company plans to lay off 1,900 employees, and end contracts for another 2,000 fixed-term workers.
