Porsche To Compensate VWCV For Not Building EV Flagship In Hanover

Porsche will reportedly pay $113 million to VW Commercial Vehicles after deciding to build the model at its plant in Leipzig.

By: Dan Mihalascu

Jan 12, 2022 at 4:23am ET

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Last month, VW Commercial Vehicles (VWCV) announced that its Hanover site would build Audi’s Artemis Project flagship EV from 2025, alongside the bodywork of a Bentley sister car.

Originally, the plant was also scheduled to manufacture Porsche’s variant of the same vehicle, but the luxury sports car manufacturer backed out of the deal, motivating that its car does not need the Artemis Project’s advanced autonomous driving functions. Porsche executives believe these functions would not suit the brand’s customer base of performance-focused buyers.

As a result, the Zuffenhausen-based brand lobbied VW Group for its version of the vehicle to be built in a Porsche plant. The parent company approved the request, but it will cost Porsche some €100 million ($113 million) to buy itself out of the project, according to sources cited by Automobilwoche.

According to initial plans, Hanover was supposed to build 25,000 units of the Porsche model a year, and VWCV had included the production estimate in its financial planning to ensure job security at the plant through 2029.

Porsche will now have to pay compensation to VWCV, allowing the latter to replace the lost production with other models.

The luxury sports car manufacturer will move production of its electric flagship, known internally as the K1, at its plant in Leipzig, Germany. The automaker plans to start production in 2026, one year later than planned in Hanover.

Delay aside, Porsche’s decision makes sense seeing as its model won’t be based on Audi’s Artemis, but will use the Premium Platform Electric (PPE) architecture jointly developed by Audi and Porsche.

The same platform has been further developed by Porsche to underpin the upcoming full-electric version of the Macan SUV and an electric Panamera, expected in 2024 or 2025.

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The Hanover factory’s works council chairwoman, Bertina Murkovic, expressed her "disappointment" at Porsche’s rejection of the site but said that the plant will be at full capacity for this decade thanks to the confirmed new products.

Those include the T7 Multivan (including a PHEV version and T7 California), T6.1, ID. Buzz in People Mover and Cargo versions, ID. California electric camper van, Audi’s Project Artemis, and the bodywork of the Artemis-based Bentley model.