Porsche AG has entered 2025 with a resolute focus on long-term growth, despite facing a series of financial and operational challenges in the first quarter. In a move that underscores its commitment to future-proofing the brand, Porsche continued investing heavily in product development, software, and battery technology—even as these initiatives weighed on short-term profitability.
In the first quarter of 2025, Porsche reported group sales revenue of €8.86 billion, a slight decline from €9.01 billion in the same period last year. Group operating profit fell more sharply to €760 million, down 40.6% year-on-year. This decline also pulled the operating return on sales down to 8.6% from 14.2% in Q1 2024.
However, automotive net cash flow rose significantly, reaching €198 million compared to €107 million a year ago—highlighting strong underlying financial discipline amid rising expenditures. As Dr. Jochen Breckner, Executive Board Member for Finance and IT, acknowledged, “The first quarter has been weaker as expected. We can’t completely escape the macroeconomic pressures, but we are counteracting them with determined action.”
A key element of Porsche’s strategy has been its commitment to transformation through substantial special expenditures totaling €1.3 billion for the year—€200 million of which was already deployed in Q1. These funds are aimed at bolstering Porsche’s resilience and profitability over the medium term, particularly through enhancements in software, product innovation, and battery initiatives.
Notably, Porsche has expanded its footprint in the battery sector by acquiring a majority stake in V4Smart GmbH & Co. KG. In partnership with VARTA AG, this move secures Porsche’s access to high-performance lithium-ion round cells, critical to its electric vehicle ambitions. The company also holds a direct stake in VARTA AG.
Porsche’s push into electrification continues to bear fruit. In Q1 2025, 39% of all vehicles delivered were electrified—26% all-electric and 13% plug-in hybrids. The newly launched all-electric Macan alone accounted for 14,185 of the 23,555 Macan units delivered, marking a 14% year-on-year increase. The Panamera saw the strongest growth among Porsche’s model lines with a 27% rise in deliveries.
Geographically, performance was mixed. Deliveries in North America surged 37%, buoyed by the resolution of import delays that affected the previous year. In contrast, China saw a 42% drop in deliveries due to intense competition and persistent market difficulties in the luxury electric segment. Porsche continues to follow a value-over-volume approach, aiming to maintain a globally balanced sales strategy amid volatile geopolitical conditions.
As a result of these dynamics and rising costs, Porsche has revised its financial forecast for 2025. Expected sales revenue now stands between €37–38 billion, down from the previously projected €39–40 billion. Operating return on sales is forecast between 6.5% and 8.5% (down from 10% to 12%), while the automotive net cash flow margin is expected between 4% and 6% (previously 7% to 9%).
Additionally, Porsche has recalibrated its battery strategy. Plans to independently scale production of high-performance batteries through its subsidiary Cellforce Group GmbH will no longer continue as originally envisioned. This realignment, combined with other negative battery-related impacts, contributed to the increase in special expenses.
Moreover, the company is adjusting its supply chain strategies to mitigate risks tied to global trade tensions, especially in light of new US import tariffs, which are already negatively impacting business in April and May.
Despite the near-term challenges, Porsche’s strategic clarity remains firm. By prioritizing innovation, sustainability, and long-term profitability, the iconic sports car manufacturer aims to emerge stronger from a period of recalibration—ready to lead in the era of electrified and intelligent mobility.
