According to media reports, Volkswagen's largest shareholder, Porsche SE, recently announced that due to the impairment of its stake in Volkswagen, Europe's largest automaker, it expects a post-tax loss of approximately €20 billion ($21.7 billion) in 2024.
The impairment on its Volkswagen investment was first disclosed in December 2024, reflecting a significant decline in the market value of both Volkswagen and Porsche AG. Porsche SE currently holds a 31.9% stake in Volkswagen and a 12.5% stake in Porsche AG.
Porsche SE plans to release its full 2024 annual financial report on March 26. The company stated that the impairment on its Volkswagen and Porsche AG holdings has reached €19.9 billion and €3.4 billion, respectively-both at the upper limit of the previously announced range. However, Porsche SE emphasized that these impairments will not affect its cash position.
The company also provided an update on its financial situation, estimating that its net debt will reach €5.2 billion by the end of 2024. Despite this, Porsche SE expects to pay dividends for the past year, though no further details were provided.
In December 2023, Porsche SE withdrew its post-tax profit forecast as Volkswagen faced mounting challenges, including factory closures and labor union disputes over wages, which complicated the automaker's annual planning.
The delays in Volkswagen's corporate planning forced Porsche SE to rely on analysts' assumptions rather than internal evaluations for its impairment tests.
Currently, Volkswagen and Porsche are struggling with weak electric vehicle demand in Europe, declining market share in China, intense competition from Chinese automakers, and new tariffs imposed by U.S. President Donald Trump. In February 2024, Porsche announced plans to cut 1,900 jobs over the next four years in response to sluggish EV demand and "geopolitical and economic challenges." In December 2024, Volkswagen Group also announced a comprehensive restructuring of its German operations, including job cuts and capacity reductions.
