Porsche Is Reconsidering Its Electric-Only Strategy

The manufacturer recently hinted that it would shift part of its focus back to combustion engines.

Porsche Engine Top

Photo by: InsideEVs

Andrei Nedelea

By: Andrei Nedelea

Oct 28, 2024 at 3:00pm ET

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Porsche says it is aware its customers want combustion cars, not EVs.
The manufacturer hinted that it will keep ICE vehicles in its lineup for longer and it could even bring back combustion engines to vehicles that are now fully electric.
Sales of the combustion-powered 718 models were up 10% from January through September of this year.

About a decade ago, more than a few high-end luxury automakers looked at the success of Tesla and said, "Why not us?" But what they're now learning is that many of their clients would want to pick an internal combustion car over an electric vehicle, and even pay a premium for it if that's what it takes. Porsche had previously committed to going all-electric at some point in the next decade, but recent statements by a company official bring that plan into question.

Porsche board member Lutz Meschke brought the issue to light on the recent Q3 earnings conference call when he said the company had observed a “slowdown in the BEV transition and the customer demand is not satisfying overall.” He went on to say, “A lot of customers in the premium and luxury segment are looking in the direction of combustion-engined cars, there’s a clear trend.”

If Porsche goes that route, it would be quite a reversal from its past all-electric dreams.

In 2022, Porsche said it expected EVs to make up 80% of all its sales by 2030, and it confirmed that it only planned to keep the 911 as a combustion model. But now with Meschke saying “We will refresh our combustion engine cars, including the Panamera and the Cayenne, and of course, we will continue to rely on plug-in hybrids,” it sounds like the manufacturer is backtracking.

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Earlier this year, Reuters quoted Porsche CEO Oliver Blume as saying, “The transition to electric cars is taking longer than we thought five years ago.” The company’s commitment to electrification remains but it will ultimately depend on “the demand of our customers and the development of electromobility in the regions of the world.”

This could indicate that Porsche, which developed the next-generation 718 sports car as a pure EV, is considering adding a combustion engine. It might implement this change if it believes it could boost sales and transform the 718 into a hybrid, similar to the latest version of the 911.

“When it comes to research and development, you’ll see more flexibility in the upcoming years," Meschke said. "We will develop new combustion-engined derivatives [of EVs] in order to give the right answer to customer demand.” If he really was talking about the 718 getting an engine, then it will be a few years until we see it since the change will require significant reengineering work.

Porsche 718 Boxster electric, the render

Does this also mean the new Macan EV is also getting back its gasoline powerplant? Its PPE platform shared with the Audi Q6 E-Tron was also created for pure EVs, so equipping it with a gas engine wouldn’t even be worth it financially. More likely, Porsche could keep the combustion Macan (its global bestseller) in the lineup without a significant hiatus by launching an updated model based on the existing car’s underpinnings and bringing its exterior design and interior in line with the rest of the lineup. It could bring back the gas-burning 718 in a similar manner; this approach is the one Volvo took with the heavily updated hybrid XC90.

Porsche has several other EVs in the pipeline, including a Cayenne-sized SUV and an even larger seven-seat high-rider codenamed K1. Both will be built on the “Sport” version of the Volkswagen Group’s Scalable Systems Platform (SSP) platform; they are expected to debut in 2026 and 2027.

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Meanwhile, the refreshed Taycan isn’t doing so great in the sales charts. It sold just over 14,000 units from January until September, noting a 50% drop compared to 2023. As good as it is, it seems buyers just don’t want it. Interestingly, sales of the 718 Cayman and Boxster, scheduled for discontinuation in 2025, saw a 10% increase.

Porsche said during its earnings call that it’s doing very well currently but it doesn’t want to lose money and it sounds like it will go against the regulators and bring combustion power back into its lineup. With more high-ranking officials from various automakers speaking out about the 2035 ICE ban and announcing their companies are rethinking their transition to an electric-only future, it sounds like there may be some drama in the future as carmakers start to clash with lawmakers.

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