Porsche is shutting down three of its subsidiaries due to decreasing sales and profits, the German automaker declared on Friday.
One significant closure is the Cellforce Group, Porsche’s battery division, which had previously undergone a reorganization in August. This reorganization occurred after Porsche abandoned plans to manufacture its own batteries, repurposing Cellforce as a research and development unit. Now, Porsche indicates a shift toward a “technology-open powertrain strategy,” meaning the company will increasingly depend on external suppliers for batteries.
Two other subsidiaries, Porsche eBike Performance, responsible for e-bike drive systems, and Cetitec, a networking software entity supporting both Porsche and the broader Volkswagen Group, are also being closed.
This decision will affect over 500 employees across the three subsidiaries.
Porsche CEO Michael Leiters stated, “We must refocus on our core business. This is the indispensable foundation for a successful strategic realignment. This forces us to make painful cuts — including our subsidiaries.”
Leiters, who became CEO earlier this year, initially communicated this strategy in March, highlighting plans to realign the business by simplifying and accelerating the company’s operations while enhancing product desirability.
Since those announcements, Porsche has exited several ventures, including selling its stakes in Bugatti Rimac and Rimac Group to a consortium led by HOF Capital.
Porsche’s push into electrification began successfully with the Taycan in 2019, but subsequent EV developments encountered delays. The Macan Electric launch was postponed by nearly two years due to setbacks in software advancements within Volkswagen’s Cariad division.
The company faces declining sales in key regions: a drop of 11% in North America, 21% in China, and 18% across Europe, although sales slightly improved in Germany.
While Porsche attributes its struggles partly to EV adoption, its ongoing challenges in China, where EVs dominate over half the market, imply other underlying issues might exist.
The shutdown of Cellforce highlights this shift in Porsche’s EV strategy. Initially intended to set its EVs apart with specialized batteries, Porsche has had to adjust its approach after delays in EV developments.
Oliver Blume had previously emphasized the future importance of battery cells, describing them as akin to the combustion chambers of traditional vehicles.
Facing difficulties in timely EV development, Porsche is shifting focus back onto internal combustion platforms, initially planned as a smaller part of its future lineup. However, the company remains committed to launching new EVs, including plans to phase out the gas-powered Macan and introduce an all-electric version of the Cayenne and its variants this year.