Reduced forecast for Porsche AG, yet stocks surge – analysts attribute increase
Porsche Faces Challenges but Pursues Strategic Shift Towards Electric Mobility
Porsche AG, the iconic German luxury car manufacturer, is navigating a difficult period, particularly in the Chinese market and with the impact of tariffs on its profits. According to analyst Ferdinand Dudenhoeffer of the Center Automotive Research, the company is in a challenging situation, with China still posing a significant problem due to the lack of a solution [1].
In the first half of 2025, Porsche experienced a 6% drop in global deliveries, and a 28-42% plunge in sales in China [1][2][3]. This decline is attributed to a sharp drop in demand in the premium and luxury segments, intensified competition from local electric vehicle (EV) makers like BYD, and the impact of tariffs on import costs, especially in the U.S.
To address these challenges, Porsche is pursuing a strategic realignment focused on product innovation and expanding its electric vehicle lineup. The company expects the revamped product range, including the all-electric Macan SUV, to be well received and looks for positive economic momentum from 2026 onward [1][3].
Porsche is also managing tariff-related costs, having absorbed about 400 million euros due to U.S. import tariffs that affected pricing and competitiveness [3]. The key strategies Porsche is employing include pushing ahead with a comprehensive product refresh focused on electric mobility, rescaling and recalibrating company operations, and offering price protection to customers to mitigate tariff effects [1][3].
Despite these challenges, Porsche's shares moved forward on Wednesday, following optimistic statements from CEO Oliver Blume [2]. Analyst Stephen Reitman of Bernstein Research noted that the new profit forecast was slightly better than what the market had expected [2]. Porsche's focus should be on improving software and infotainment for its electric models [3].
The chart technicals suggest that Porsche's stock may have found its bottom. If the 50-day moving average at 42.58 euros is breached, the path to the 100-day moving average at 45.11 euros would be clear [3]. The renewed targets for this year are in line with the analyst consensus, and Tom Narayan's price target for Porsche is 45 euros [3].
It's important to note that the CEO and majority shareholder of the publisher Boersenmedien AG, Herr Bernd Foerstch, has direct and indirect positions in Porsche AG [3]. The consolidated result for January to June was 718 million euros, a decline of over 71% from the 2.2 billion euros reported in the same period last year [3].
In conclusion, Porsche is trying to stop the sales decline in China and improve its competitive position through innovation in EVs and strategic adjustments across markets, while preparing for a turnaround starting in 2026 [1][3]. The intense local competition and tariff environment remain major headwinds throughout 2025 [1][2][3].
[1] The Verge [2] Reuters [3] Bloomberg
In the face of these challenges, Porsche has decided to invest heavily in electric mobility and product innovation, aligning its business strategy towards the expanding electric vehicle market. This strategic shift in finance is expected to yield positive economic returns from 2026 onward, as the company introduces newer electric vehicle models, such as the all-electric Macan SUV, and navigates through the challenging tariff environment.
