Porsche Warns Employees The Business Model 'No Longer Works'

The CEO says tariffs and weak EV demand are "hitting us hard."

Porsche 911 GT3 Touring (2025) put to the test

Photo by: Porsche

Adrian Padeanu

By: Adrian Padeanu

Jul 24, 2025 at 2:29am ET

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To say Porsche has seen better days would be an understatement. Global sales fell three percent last year, when tariffs weren’t even an issue. Shipments continued to decline through June this year, dropping six percent compared to the first six months of 2024. Even tougher times lie ahead, as evidenced by a recent decision to cut costs by eliminating 1,900 jobs through 2029.

CEO Oliver Blume told employees that additional cost-cutting measures are planned in response to dwindling sales in China and higher expenses triggered by the Trump administration’s tariffs. In an email to staff seen by Bloomberg, Porsche’s chief admitted that the “business model, which has served us well for many decades, no longer works in its current form.”

Photo by: Porsche

Blume didn’t sugarcoat the situation: “All of this is hitting us hard—harder than many other car manufacturers.” By the end of the year, the company’s lineup will lose two gas-powered sports cars and gain an electric SUV. The final current-generation Boxster and Cayman will roll off the assembly line in October, with electric replacements arriving no sooner than 2026. A fully electric Cayenne will be revealed in the coming months.

It’s too early to tell whether the Cayenne EV will move the needle, but Porsche may be encouraged by the strong start of its smaller electric crossover, the Macan. On the other hand, the company’s original EV is struggling: Taycan sales plummeted 49 percent in 2024 and dropped another six percent in the first half of 2025.

North America remains Porsche’s largest market, where it posted a one percent increase in deliveries last year, followed by a 10 percent gain in the first half of 2025. However, the trend might not continue in the second half, as “market conditions” have led to yet another round of price hikes. Some models are up by as much as 3.6 percent. That might not be a deal-breaker for 911 buyers accustomed to paying top dollar, but further price increases could deter prospective customers of volume-oriented products such as the Macan and Cayenne.

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While Porsche is holding steady in the U.S. for now, it’s facing serious challenges in China. Sales plunged 28 percent in 2024 and fell by another 28 percent through June. Zuffenhausen blames “challenging market conditions,” as domestic brands continue to launch more affordable, tech-laden EVs.

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Whether more job cuts are planned remains unclear, though it’s safe to say that discontinuing the first-generation Macan in 2026 won’t help reverse the trend. A new gasoline crossover positioned below the Cayenne is under consideration, but even if approved, it won’t arrive until closer to 2030.

As for the upcoming three-row SUV, a firm launch timeline hasn’t been given, likely due to weaker-than-expected EV demand. To offset slower sales and a shrinking ICE portfolio, Porsche is now considering combustion-engine versions of models originally intended to be electric-only. The goal of having EVs make up 80 percent of total sales by 2030 has officially been dropped, with Blume admitting the target “is not realistic” anymore.

Source: Bloomberg

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