Porsche to predominantly dismantle battery affiliate company
Porsche Winds Down Battery Subsidiary Cellforce Amid Global EV Market Challenges
Porsche's CEO, Oliver Blume, has announced plans to wind down the battery cell subsidiary, Cellforce, due to weak global demand for electric vehicles (EVs) and the inability to achieve the required production scale for battery cell manufacturing.
This decision will lead to significant consequences for the company and its employees. Around 200 of Cellforce’s roughly 286 employees will be laid off, with only about 80 remaining in a scaled-back research and development (R&D) function at the Kirchentellinsfurt site in Germany.
The shift in strategy reflects Porsche's retreat from vertical integration in battery production and a focus on collaborations and partnerships to secure battery supply. This move comes amidst broader challenges faced by European battery manufacturers competing with Asian battery giants.
The shutdown of Cellforce's production facilities is expected to cost Porsche 295 million euros. The company had received substantial government support, with around 60 million euros announced, and investments aimed at boosting local high-performance battery production. However, the exact amount of public funds that have flowed to Cellforce is initially unclear.
For the employees, this means considerable job insecurity and potential unemployment, as Cellforce does not guarantee job security and many are at risk from the mass layoffs. Some former Cellforce employees may be transitioned to VW Group’s PowerCo, Porsche’s other battery-related endeavors, but the bulk of the workforce faces layoffs.
The wind-down of Cellforce's production facilities marks a setback for Europe's ambitions of developing a competitive domestic battery industry. Porsche had initially planned for a significantly larger battery factory, but these plans were later abandoned.
Investors were sought for Cellforce until recently, and Porsche has been investing in new internal combustion engines since the beginning of the year. Unlike at the parent company, there is no employment guarantee for Cellforce employees.
Defense companies are said to be interested in the parts of Cellforce to develop batteries for military drones. However, the focus now shifts to supporting the affected employees and navigating the transition to a smaller R&D unit.
A general assembly for all Cellforce employees has been scheduled for Monday. It remains to be seen how this decision will impact Porsche's ambition to make the sports car manufacturer an electric pioneer with its own battery production.
References:
- Bild
- Handelsblatt
- Reuters
- Bloomberg
- Autocar
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