Porsche's 2025 profits plummet 91% as combustion engine bets backfire
Porsche's profits have collapsed in 2025, falling by 91.4% compared to the previous year. The luxury carmaker reported a net income of just €310 million, with near-zero profitability for the full year. The steep decline follows heavy spending on extending internal combustion engine production.
The company's financial troubles stem from a mix of costly decisions and shifting market trends. Billions were spent to keep combustion engine models in production, nearly erasing profits. At the same time, Porsche misjudged how quickly buyers would switch to electric vehicles, leaving it exposed as demand for traditional engines persisted.
Sales in China have weakened, while higher tariffs in the U.S. added further pressure. Over the past five years, Porsche's share of the combustion engine sports car market shrank from 45% to 32%. Rivals like Ferrari and Lamborghini gained ground—Ferrari's 12-cylinder models sold strongly in Europe and North America, and Lamborghini's Revuelto hybrid found success in Asia.
Looking ahead, Porsche expects another drop in sales for 2026. However, it forecasts a recovery in profitability, targeting margins above 5%. The brand is now refocusing on conventional vehicles to meet lingering demand from buyers still loyal to combustion engines.
The financial hit underscores the challenges of balancing electrification with traditional engine production. Porsche's pivot back toward combustion models reflects a market where many sports car buyers remain hesitant to go fully electric. The company's outlook hinges on stabilising sales and cutting costs to restore stronger profits.
