Porsche. The 5 billion lesson.
Porsche lost 98 percent of its profit in a single year, from 5.3 billion to 90 million. One of the most profitable car companies in the world is now making almost nothing.
THE GIST ON PORSCHE: "The 5 Billion Lesson"
What did Porsche bet on?
Like most modern car makers, Porsche bet big on electric. It built the Taycan and poured billions into EV platforms, because everyone said electric was the future. It also bet big on China, the biggest car market in the world.
But China doesn't play by European rules. It made its own electric cars with better tech at half the price.
Why did customers leave?
You pay 100 grand for a Porsche because nothing else feels like it on the road. Go electric and that feeling is gone. Porsche lost 28 percent of its China sales in a single year.
What now?
Porsche has written off nearly 4 billion euros, brought back the engines it was going to kill and binned EV platforms it spent years developing. The new plan is to go back to what it was always good at: engineering.
This is what happens when the barrier to entry disappears. It happened to photography and music production. It's happening to half the professional services industry. The people who charge the most are the last to find out the market wasn't paying for their effort. It was paying for an outcome. And when someone delivers it faster, cheaper and easier, 50 years is no longer a selling point.
Would you buy an electric Porsche?
Your take. One tap, then see how everyone else voted.
Quick answers
How much did Porsche's profit fall?
98 percent in a single year, from 5.3 billion to 90 million.
What did Porsche write off?
Nearly 4 billion euros.
What is Porsche's new plan?
Go back to engineering: bring back the engines and bin the EV platforms.
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