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Porsche has said it would ditch plans to produce its own batteries due to weak demand for electric vehicles, a setback that also highlights the difficulty faced by carmakers in scaling up battery production.
The German sports-car maker said on Monday the decision to pull the plug on its independent battery project Cellforce was made after sales of EVs in China and the US fell “short of expectations”, despite a stronger performance in Europe.
The retreat from battery production is a blow for chief executive Oliver Blume, who oversaw the establishment of Cellforce in 2021, when he said it would put Porsche at the “forefront” of battery technology and “shape the future of the sports car”.
But on Monday Blume cited “challenging conditions” in the US, where the company has been hit hard by President Donald Trump’s tariffs, and China, where the market for luxury EVs had “not yet developed”. Porsche does not have a manufacturing presence in North America.
In the first half of the year, 57 per cent of the vehicles delivered by Porsche in Europe were electrified — either full EVs or hybrids — compared with 36 per cent globally, highlighting weakness in the US and China.
Blume, who has led Porsche since 2015, is also the chief executive of its parent company Volkswagen, where he took the reins in 2022 and has been driving a big restructuring plan.
Porsche indicated that it would cut about 200 jobs at Cellforce, though employees would be offered opportunities at VW’s larger battery division, PowerCo.
Porsche’s decision to abandon its own battery production project will sharpen focus on Blume’s broader plans for the group, and the industry’s attempts to build a European supply chain and reduce dependence on Asia.
He said that while electromobility remained “essential” to Porsche’s strategy, a “lack of economies of scale” meant it no longer made sense to pursue its own battery production.
Porsche had initially intended to increase production at Cellforce’s factory in Kirchentellinsfurt and then expand to a second location. Instead, Cellforce would shrink its activities and focus exclusively on the research and development of battery cells, the company said.
Plans for battery production were no longer “economically viable”, Michael Steiner, Porsche’s board member for research and development, said in the statement.
“Due to a global lack of volumes, it is not possible to scale its [Cellforce’s] own production to the planned cost position,” he said.