Porsche expects market value to halve after billions of dollars in EV losses
Porsche is facing financial troubles after reporting billions of dollars in losses on investments in electric vehicles.
straight arrow news
Porsche P911_p.DE on Friday appointed former McLaren boss Michael Reiters as its new CEO, in a bid to revive the German luxury sports car maker’s fortunes and end the sideline of Oliver Blume, who had been at odds with some investors.
Blume, who took the wheel of Porsche 10 years ago, has also run parent company Volkswagen VOWG_p.DE for the past three years, during which time both companies have struggled.
“Negotiations with Dr. Reiters will begin,” Porsche said in a statement, adding that key supervisory board members had approved negotiations regarding the end of Mr. Blume’s term.
Investor: “The company is listening to criticism”
Porsche is looking to hire a new CEO to improve its performance as it faces global tariffs, declining demand in China and a costly shift back from electricity to internal combustion engines.
Just three years ago, Porsche’s market value was the second highest in German history, making the carmaker the most valuable in Europe at a value of 83 billion euros ($97 billion).
Once a cash cow for Volkswagen, Porsche’s profit margins have fallen, its stock price has more than halved and it fell out of the blue-chip DAX index last month. Meanwhile, Volkswagen’s stock price has fallen by more than a third.
Porsche shareholder DWS welcomed the apparent early end of Blume’s dual role as an important signal to the market.
“This shows that the repeated criticisms are finally being heard,” said Hendrik Schmidt, head of stewardship and governance at DWS, which owns about $34 million in Porsche stock.
“However, it is clear that even with new leadership, old challenges will have to be tackled. Porsche must pursue an e-mobility path in the future and also improve its sales situation in China,” Schmidt added.
Porsche shares rose 1.2% after Porsche named Mr. Reiters as a candidate to succeed Mr. Blume. Volkswagen shares, which did not respond to requests for comment, rose 1.7%.
Reiters, a well-known figure in the sports car world who has held positions at McLaren, Porsche and Ferrari RACE.MI, could be appointed as Porsche’s CEO as early as Friday, and could take up the role in 2026, German magazine Wirschaftswoche reported.
Leiters left McLaren in April following its merger with EV startup FourSeven, and was chief technology officer at Italian luxury car maker Ferrari from 2014 to 2019.
Prior to that, he joined Porsche where he spent 13 years as SUV Director, contributing to the development of the successful Cayenne model.
“His background seems to fit well with Porsche’s sports car and SUV DNA,” Metzeler analyst Pal Scarta said.
Porsche, Volkswagen struggle in China
Porsche’s fortunes reflect a broader downturn in Germany’s once-dominant auto industry and the broader German economy, which has struggled to grow and battled high costs, tariffs and fierce foreign competition.
Porsche is making a particular effort in China, where Blume recently announced a costly shift in strategy away from EVs and back to the internal combustion engine models that made it famous.
Porsche’s sales in China have fallen by nearly a third since setting a record of 95,671 units in 2021.
Sales in China in the first three quarters of this year were down 26% compared to the same period in 2024, accounting for just 15% of the total, as consumers rejected Porsche’s electric cars in favor of futuristic sporty alternatives from China.
Volkswagen is also struggling in China, with sales dropping from about 3.7 million units in 2020 to 2.8 million units in 2024.
Volkswagen was China’s number one automaker for many years, but it was overtaken by BYD in 2024. At the current growth rate, China’s Geely Automobile is likely to overtake Volkswagen in third place in 2025.
“This step was too late and a lot of time was wasted,” said Ingo Speich of Deka Investment, a German investment trust that owns about $48 million in Porsche stock.
“Mr. Blume must restore the confidence of the capital markets. He must press ahead with the restructuring and achieve the announced model and goals,” Speich added.
Blume, who is seen as close to the Porsche/Piech dynasty that controls Volkswagen through the Porsche SE holding company, told Germany’s OMR Business podcast last month that he works about 70 hours a week managing both Porsche and Volkswagen.
(1 dollar = 0.8554 euro)
Additional reporting by Ilona Wissenbach. Written by Friederike Heine and Matthias Williams. Editing: Mark Potter, Elaine Hardcastle, Alexander Smith
