Luxury automaker Porsche posted an operating loss of 966 million euros in the third quarter while its operating profits in the first nine months of the year have plunged from $4.035 billion euros to just $40 million euros – a staggering decline of 99%, according to the company’s latest quarterly report.
Porsche’s return on sales (RoS) once reached 14.1% but in the first nine months of this year, it plummeted to 0.2%. The automotive division has suffered even more, with a negative RoS of -1.0%. These figures represent a dramatic shift for what was once one of the most profitable industries in the world.
Porsche was once the cash cow of the Volkswagen Group, with a market value peaking at 83 billion euros three years ago, making it the highest-valued automotive brand in Europe. However, due to uncertainties in global trade and intensified competition in the electric vehicle transition in the Chinese market, Porsche’s performance has continued to decline, with its market value halved since its IPO in 2022.
Porsche explained on its official website that the unusual drop in profit is primarily due to five major reasons: first, special expenses related to product strategy adjustments; second, the challenging market environment in China, particularly in the luxury car segment; third, “one-time” costs associated with battery activities; fourth, expenses related to organizational changes; and fifth, increased costs from U.S. import tariffs.
Last month, Porsche announced the postponement of some pure electric vehicle models, extended the market lifecycle of several fuel and hybrid models, and terminated its in-house battery production plan, resulting in additional expenses of about 2.7 billion euros from related restructuring measures.
