Porsche shares tumbled by as much as 8% on Friday (Feb.7), marking the biggest drop among European firms and its worst single-day decline since its much-hyped 2022 IPO on the Frankfurt Stock Exchange. The sharp decline followed a warning from the German luxury automaker that rising costs—especially for new model rollouts and battery-related investments—would significantly impact 2025 profits.
Late Thursday, Porsche stunned investors by slashing its profit margin forecast to just 10%, a sharp drop from the 20% target it had touted before its €9.4 billion ($9.8 billion) IPO. The manufacturer of the legendary 911 sports car revealed it would take a €800 million profit hit to fund the development of new combustion-engine and plug-in hybrid models.
“This could be Porsche’s last chance to prove it can turn around its business before losing the trust of long-term shareholders,” analysts at Deutsche Bank warned in a note. Regarding its dividend, the company said that its dividend would likely remain at last year’s level, pending final board approval.
Despite its ambitious entry into public markets, Porsche’s valuation has plummeted since its record-breaking IPO, where it initially surpassed its parent company, Volkswagen AG, in market capitalization. Over the past 12 months, Porsche’s stock has declined more than 30%, and its market capitalization has halved from its May 2023 peak of just under €110 billion.
China Woes & Executive Shake-Up
Porsche’s struggles are compounded by lagging EV adoption, which has severely impacted sales in China—its largest market. Slowing deliveries and increased competition have eroded its once-dominant position in the region.
The company is also grappling with internal turmoil, with reports suggesting that Porsche may soon dismiss both its CFO and sales chief following mounting pressure over the company’s financial underperformance.
German media outlets have speculated that CEO Oliver Blume—who currently holds a dual leadership role at both Porsche and Volkswagen—may also be forced to step down from Porsche’s top position to focus solely on leading VW, which owns 75% of the Stuttgart-based carmaker’s share capital.
Meanwhile, Porsche SE, the investment arm controlled by the Piech and Porsche families, retains 12.5% of the company and remains Volkswagen’s largest shareholder.
With shareholder confidence faltering, leadership uncertainty mounting, and profitability under pressure, Porsche faces one of the most critical turning points in its modern history.
Porsche at a Glance
Year founded: 1931 Headquarters: Stuttgart, Germany Sales Revenue: €39 to€ 40 bn(The detailed financial results for 2024 are anticipated to be published in March 2025) Employees: 42,140 (as of end 2023)
