Porsche is now bleeding so much in the Chinese market that the brand is now seriously considering whether to withdraw from the world's largest car market.
Porsche is considering halting electric car sales in China after a major sales slump and customs issues. However, CEO Oliver Blume will provide clarification in a couple of years.
Porsche is experiencing significant setbacks in the Chinese market. Sales in China fell by 42 percent in the first quarter of 2025.
That is, when compared to sales just one year ago. The brand's director Oliver Blume now admits that Porsche will completely stop selling electric cars in China.
The large decline and uncertainty about the future are putting pressure on the German car manufacturer.
The Chinese market has long been lucrative for European luxury car brands. But times are changing rapidly.
Competition from local Chinese car manufacturers has intensified significantly. Chinese brands often offer cars at lower prices. This reduces demand for international brands.
Porsche is clearly feeling the change. The entire 2024 was marked by challenges for the German carmaker in China. Sales fell by 24 percent compared to the previous year. The start of 2025 shows no signs of improvement for Porsche in the region.
A major factor in Porsche's decline in China is competition from the country's own car brands. Xiaomi, known for electronics such as mobile phones and internet solutions, launched the company's first electric car, the SU7, last year.
It is cheaper and has more horsepower than Porsche's Taycan and Macan.
The Xiaomi SU7 costs around 455,000 Danish kroner in China. In comparison, a Porsche Taycan costs around 780,000 Danish kroner on the Chinese market. The large price difference makes Xiaomi an attractive alternative for many buyers.
Tariffs and competition are putting pressure on Porsche
Porsche CEO Oliver Blume acknowledges the competition, but he doesn't see the Xiaomi SU7 as a direct competitor.
Blume believes that the SU7 cannot be compared to the Porsche in terms of driving characteristics, he said at the Shanghai Auto Show.
In addition to the challenges in China, Porsche is also affected by trade policy. The US tariffs on imported cars are affecting the manufacturer. Porsche has no own production in North America. Therefore, all cars must be imported to the region, which is Porsche's largest sales area.
These tariffs and weaker sales in China are having an impact. Porsche now expects a lower operating margin in 2025. The forecast has been revised down to 6.5 percent from a previously expected 10 percent. This shows the economic uncertainty the brand faces.
Porsche emphasizes that the US tariffs could further squeeze profits. This depends on whether the EU and the US find a solution regarding the tariffs. The company finds it difficult to assess the exact financial effects for the financial year at this stage.
According to NTV, Porsche is hesitant to assess how the 2025 financial year will end.
"At this time, it is not possible to make a reliable assessment of the effects for the financial year." This reflects the uncertainty that characterizes the automotive industry globally, says the brand in Zuffenhausen.
Porsche's future in the electric car market
Porsche's strategy in China differs from some of its competitors. The manufacturer has chosen not to develop or launch special models specifically for the Chinese market, an approach that other automakers have had success with.
It is in light of the many challenges that Oliver Blume casts doubt on the future of electric cars in China. Blume tells Automotive News that he will now wait and see.
– We will see over the next two, three years whether Porsche still exists as an electric car brand here.
Porsche's problems extend far beyond China, however. But they still stem from electric cars. In fact, the Germans now intend to spend money that was originally earmarked for new electric cars on combustion engines instead.Read more about it here .
