€4 Billion Gone

The Collapse of Porsche’s House of Cards

Porsche, long seen as the embodiment of profitability in the automotive world, has just revealed dramatic financial results: over the first nine months of 2025, the group’s operating profit plunged from €4 billion to just €40 million, a staggering 99% drop. Yet customer deliveries fell by only 6%. The equation makes no sense: Porsche is still selling cars, but it’s no longer making money.

This crisis isn’t about demand — it’s the simultaneous collapse of every pillar that once made Porsche’s business model unshakable.

The House of Cards of Profitability

It would be a mistake to think Porsche only made money from selling new cars. Its real secret lay in a sophisticated stack of revenue streams:

• Highly profitable captive financing.

• Exceptionally high residual vehicle values.

• Enormous profit margins on options.

• Loyal after-sales customers.

• Strong resale values in a stable premium used-car market.

In 2025, that entire ecosystem seized up at once:

1. The accounting and strategic shock: Porsche had to record €2.7 billion in exceptional charges, tied to a major overhaul of its product strategy and battery operations. This enormous cost tells the story: the all-electric pivot failed to deliver the expected return on capital, forcing the company to abruptly slow its rollout and backtrack on several EV models.

2. The collapse of the used-car market: This is a major issue — the sharp fall in residual values for used electric vehicles. Porsche had relied on high resale values to offer attractive lease rates. With accelerated depreciation of used EVs, the brand and its captive finance arm had to revise resale assumptions and increase provisions, leading to heavy accounting losses.

3. The price war in China: Long a growth engine, the Chinese market is now bogged down in an unprecedented price war in the premium EV segment. The perceived value of European models is eroding under pressure from more aggressive local competitors. Porsche still sells, but is forced to multiply discounts and squeeze margins on every car.

4. The customs and tax wall: In the U.S., 15% tariffs on European imports have forced the brand to slash margins to stay competitive. In Europe, skyrocketing CO₂ penalties (set to hit €100,000 by 2028) are making the total cost of ownership prohibitively high.

The Flat-6 DNA vs. the Blindness of Leadership

Porsche’s crisis is not that of a brand that can’t sell, it’s that of a business model collapsing under the weight of transformation.

Customers remain attached to the brand, but Porsche’s DNA is the emotion of the Flat-6 engine. Yet Mercedes-AMG CEO Michael Schiebe recently claimed that V8 enthusiasts would happily switch to electric cars. That statement has been disproven by the dismal failures of the EQS lineup, and the hybrid C63 AMG, despite its performance, still has just four cylinders. When customers hesitate, it’s crucial to listen to them, not try to sell them something that doesn’t meet their expectations.

The story of 2025 is that of a cruise ship making a 180° turn and suffering the blowback: having to backpedal to reintroduce combustion and hybrid engines makes sense, but it’s also an admission of strategic failure. Porsche’s CEO, in fact, was dismissed just one week before these results were published.

The WOT Lesson: Between Caution and Passion

The crisis Porsche is facing sends a powerful message to the entire industry: the solution is not to abandon combustion engines overnight, but to manage the transition to electric power as smoothly and intelligently as possible, especially for a brand with an identity as deeply rooted as Porsche’s.

Today, a fundamental question arises: does Porsche really belong in the mass electric vehicle market? Nothing could be less certain and we wouldn’t want to be in their strategists’ shoes.

That said, Porsche’s recent return to combustion and hybrid engines at the core of its strategy is, for WOT, one of the best pieces of news this year. It confirms our belief: mechanical emotion still has a bright future. We’ll gladly optimize these new models through tuning that fully respects mechanical and environmental tolerances. It’s by refining existing engineering that we ensure its longevity.