With so much pressure and focus being put on the automotive industry to move toward a carbon-neutral future, electric vehicles (EVs) have been the solution of choice for the government and many car manufacturers. However, it now seems that some are reverting back to internal combustion engines due to low sales and lack of demand.
Porsche Switching Back?
Recently, Porsche announced that there has been a noticeable dip in the demand for fully electric vehicles so will now switch back to combustion engines and hybrid powertrains. This obviously won’t be a cheap move for Porsche who have been moving towards an EV lineup in recent years. Preliminary financial figures released by Porsche forecast an $831 million (approx £665 million) price tag for product expansion and development. It’s worth noting that this is the forecast for 2025 on its own!
That eye-watering figure does include “battery activities” which would obviously point to hybrid powertrains still being a focus moving forward. Porsche expects that this big switch in strategy will lower profit margins to between 10% and 12% for the year compared to their long-term target of 20%.
Why Change Now?
Porsche, like many manufacturers, faces big challenges in the electric vehicle market, particularly in China. The company’s deliveries decreased by 3% last year, with a 28% decline in Chinese sales. This is largely due to the slightly disappointing reception of the electric Taycan. These factors have led Porsche to not only increase its combustion engine lineup but also look at making hybrid versions of models that were initially planned to be exclusively electric. This includes continued investment in V8 engines for the Cayenne and Panamera models beyond 2030.
With EVs coming under seemingly less than positive attention lately, will the internal combustion engine make an unexpected comeback?
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