Porsche has reported a dramatic collapse in profits for 2025, with earnings falling by 91.4% to just 310 million euros, the Volkswagen subsidiary announced on Wednesday. New CEO Michael Leiters, who took up his position in January, outlined his response to the crisis, announcing that Porsche would streamline its management structure, reduce hierarchies, and cut bureaucracy. "We are using the current challenges as an opportunity," he said.
Porsche had invested heavily in electric vehicles but found limited buyer demand for its fully electric models. The company had already announced in autumn that it would delay the launch of several fully electric models and shift its focus back towards combustion engine and hybrid vehicles instead. The total costs of this strategic reversal were put at 3.9 billion euros, including 700 million euros written off for the abandonment of the company's own battery production programme.
US tariffs added a further burden of around 700 million euros to the group's finances. Revenue for the year fell by 9.5% compared to the previous year to 36.3 billion euros. Customer deliveries dropped by around 10% to 279,449 vehicles.
According to the company, the dramatic fall in earnings was driven by three factors: a difficult market environment in China, the weight of US tariffs, and the costs associated with the strategic shift away from electric vehicles. The China market had proved particularly challenging, with demand for Porsche's models falling significantly in one of its most important markets.
The decision to scale back its electric vehicle ambitions, after having committed substantial resources to the transition, came at a heavy financial cost, with the total bill for the strategic reversal reaching 3.9 billion euros.
Leiters, who stepped into the role in January following the departure of his predecessor, moved quickly to signal a change in direction at the top of the organisation. He announced plans to streamline Porsche's leadership structure, flatten hierarchies, and reduce bureaucracy across the company. "We are using the current challenges as an opportunity," he said.
Looking ahead to 2026, Porsche is anticipating what it described as "very challenging market conditions" once again. The company noted that the luxury segment in China remains "under continued pressure" and that geopolitical uncertainties as well as US tariff policy are likely to persist. Porsche also noted that potential impacts from the latest developments in the Middle East have not yet been factored into its current forecasts. For the full year 2026, the company is projecting broadly stable revenues of between 35 and 36 billion euros.
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