Porsche's Operating Profit Plummets by 67% in First Half, Lowers Full-Year Forecast

On July 30, Porsche announced its financial report for the first half of 2025. The group's sales revenue was 18.16 billion euros, down 6.7% from 19.46 billion euros in the same period last year; operating profit was 1.01 billion euros, a significant decline of 67% from 3.06 billion euros in the same period last year. The group's operating profit margin was 5.5%, compared to 15.7% in the same period last year.

Porsche stated that the decline in performance was mainly due to the U.S. imposing additional tariffs and factors such as product line updates and upgrades. In the first half of this year, Porsche delivered a total of 146,391 vehicles to customers worldwide, a year-on-year decrease of 6.1%. Among these, electrified models accounted for 36.1%, including 23.5% fully electric vehicles and 12.6% plug-in hybrid vehicles.

Image source: Porsche official website

Due to U.S. President Trump's imposition of a 15% tariff on European imported cars, Porsche is facing greater pressure and has lowered its performance forecast for the third time this year. The company stated that its operating profit margin for 2025 may drop to 5%, whereas the previous target was at least 6.5%. Porsche also mentioned that the revised performance forecast includes the impact of the U.S. tariffs, as well as approximately 1.3 billion euros (about 1.5 billion U.S. dollars) in costs related to brand strategy adjustments.

Oliver Blume, Chairman of the Executive Board of Porsche, stated: "We continue to face significant challenges worldwide, and these are by no means short-term fluctuations. The global landscape is undergoing a fundamental shift—especially when compared to market expectations from a few years ago. As a result, some of the strategic decisions we made at that time are no longer applicable today. This is precisely why we are fundamentally further developing Porsche. Our newly revamped product lineup has been well received by customers, and we expect to see a renewed momentum of positive business growth starting from 2026."

As investors had already anticipated that Porsche would lower its earnings forecast, the company's share price rose by as much as 4.1% in early trading on the Frankfurt Stock Exchange on July 30. However, the stock price has already fallen by 21% so far this year.

Porsche is currently facing multiple pressures, including weak demand for electric models, declining sales in the Chinese market, and the added burden of U.S. tariffs. The company is attempting to regroup by replacing several senior executives, further cutting costs (including layoffs), and increasing the production of gasoline and plug-in hybrid models.

The United States recently agreed to reduce the tariff on automobiles imported from the European Union to 15%. Although this rate is much lower than the previous 27.5%, it is still significantly higher than the 2.5% level before the trade tariff offensive initiated by Trump.

The United States has recently surpassed China to become Porsche's largest single market, but the company does not have any factories on American soil. All the cars sold in the U.S. market are imported from Europe. In explaining the company's response to U.S. tariffs, Porsche CFO Jochen Breckner stated that the company raised its prices in the U.S. market by 2.3% to 3.6% in July.

Breckner added that the company currently has no plans to establish a production base in the United States to avoid tariffs, but is evaluating the situation.

Regarding reaching any sector-specific agreements with the U.S. government to further reduce trade barriers, Porsche Chairman Oliver Blume said he agrees with Mercedes-Benz CEO Ola Kaellenius’s view that such a situation will not happen.

In February this year, Porsche announced that it will lay off an additional 1,900 employees over the next four years, but stated that no forced layoffs will take place due to a job security agreement effective until 2030.

However, Porsche stated that management is "resolutely advancing extensive company-wide restructuring and reform measures," and negotiations with employee representatives will begin in the second half of the year.