The green butcher’s bill keeps rising.
Porsche AG will trim its workforce by 1,900 employees by the end of the decade in response to weak electric vehicle demand and “challenging geopolitical and economic conditions.”
The Volkswagen AG-controlled luxury brand plans to reduce headcount at two German sites through voluntary measures like early retirement and severance packages, and will take a “restrictive approach” to new hires, it said Thursday.
The company had scaled back its EV targets last year. And like so many other German automakers, it has been struggling in China (sales down 28 percent last year!). They have been hit by a deadly trifecta: The rise of Chinese EVs, the increasing preference of Chinese consumers for Chinese brands and, more generally, the weaker Chinese economy.
An interesting twist was the reason the company has given for taking an €800 million charge.
Porsche said late Thursday that it will take an €800 million ($831 million) hit this year tied to expanding its product portfolio with more combustion engine and plug-in hybrid models.
Well, that wasn’t how the story was meant to go.
After a good start with the 2020 Taycan, an EV, Porsche’s EVs experience has been underwhelming.
There are reports that VW and Audi may upgrade their combustion engine lineups. All VW (which is in some trouble these days) is saying is that it “has not changed its plans to phase out the combustion engine in Europe by the early 2030s and will react flexibly to possible market changes.”
The market! Whatever next.
The authors of the second Bloomberg story report that the Porsche stock has fallen by a half in the past eighteen months, and note how costs had risen as a result of “executives having misjudged how eager sports-car buyers were to go electric.”
They did?
Fools.
Probably read too much Bloomberg propaganda.