According to Bloomberg, Porsche shareholders are urging the luxury car manufacturer to slow down its electrification efforts as the global electric vehicle market's growth deceleration threatens the company's sales and profits.
At the upcoming annual shareholder meeting on June 7, Porsche CEO Oliver Blume will be questioned about his insistence on achieving more than 50% electric vehicle sales by next year. Competitors like Mercedes-Benz Group are slowing down their electrification pace due to sluggish demand.
In his address to shareholders, Blume is expected to mention the "challenging" situation in the Chinese market. Investors have noted that Porsche's sales in China have declined and component procurement issues have arisen, putting pressure on the company's stock price as it attempts significant product line reforms. Over the past year, Porsche's stock price has dropped by more than one-third, whereas Ferrari's stock has risen by approximately 40% during the same period.
Ingo Speich of investment firm Deka Investment stated, "The excitement from Porsche's IPO has faded." He pointed out that deliveries of Porsche's flagship electric vehicle, the Taycan, nearly halved in the first quarter, indicating that "consumers are more likely to resist than buy it."
Bloomberg's report suggests that Blume will defend his plan to update five out of Porsche's six product lines within a year, arguing that the additional expenditure will pay off in the future. Much of this hinges on whether the new electric Macan, set to be delivered in the second half of the year, can match the popularity of its internal combustion engine version, which had the highest sales among Porsche models last year, second only to the Cayenne.
Porsche plans to launch electric versions of the 718 Boxster and Cayman around 2025, followed by an electric Cayenne model. The company aims for fully electric models to comprise over 80% of its total sales by 2030.
Moritz Kronenberger from Union Investment remarked that Porsche should release electric vehicle products based on market demand. He added that selling more internal combustion engine models until electric vehicle demand picks up again would improve profit margins and free cash flow.
However, Deka's Speich expressed doubts about electric vehicle demand and urged Blume to accept lower sales and avoid price cuts to protect the brand. Stifel investment bank analyst Daniel Schwarz noted that the Taycan depreciates faster than the 911 sports car, which could deter buyers.
