Porsche's margins plunged in the first quarter, it said today, forcing the sportscar maker to cut its 2025 outlook in the wake of weakness in China, its main market, rising supply chain costs and US tariffs that are disrupting the global car industry.
The US tariffs are expected to raise car prices by thousands of dollars, reducing demand and hurting job growth, rattling an automobile industry already struggling with a slowing transition to electric vehicles.
Shares in Porsche were down 6% in early Frankfurt trade today after the carmaker's first-quarter results.
In April, Porsche, one of the carmakers most exposed to tariffs as it has no US production, said it had shipped added inventory to the US to get ahead of tariffs and kept prices constant for orders made in March.
The group last night said the tariffs, in place since April at 25%, weighed on its business in April and May, and it warned that its adjusted outlook does not factor in the future effects of tariffs.
Finance chief Jochen Breckner, in the job since late February, said the macroeconomic environment would remain challenging. "We can't completely escape this, but we are doing everything within our power to counteract it."
Porsche said it now expects revenue of between €37-38 billion in 2025, down from its previous forecast of €39-40 billion. Its profit margin is forecast to drop to 6.5-8.5%, down from a previous forecast of 10-12%.
According to the average of analyst estimates in an LSEG poll, Porsche's operating margin is seen at 9.7% on revenue of €38.8 billion. Its first-quarter operating margin fell to 8.6%, below the 9.8% analyst average estimate in an LSEG poll.
The car maker, which at its stock market debut in 2022 had a higher valuation than its parent company, Volkswagen, has fallen from grace since, struggling in particular with low sales in China, its top market, where first-quarter sales dropped 42%.
Bill Russo, CEO of Shanghai-based advisory firm Automobility, said Chinese customers of electric cars had been drawn to domestic brands because of their improved technological offering.
"No foreign company believed that the Chinese could somehow build equity that was superior to the foreign brands, especially the Europeans," he said.
Porsche also said it would no longer pursue plans to expand high-performance battery production at its Cellforce subsidiary, and it cited a decline in demand in China for all-electric luxury cars.
