Porsche is closing three of its subsidiaries as it copes with falling sales and declining profits, the German automaker announced Friday.
The automaker’s battery subsidiary, Cellforce Group, is perhaps the highest-profile casualty. The division had already been through a “realignment” in August after Porsche dropped plans to make its own batteries, turning Cellforce into a research and development arm. Now, Porsche says it’s pursuing a “technology-open powertrain strategy” — corporate-speak that indicates the automaker will rely more heavily on other companies for its batteries.
Porsche eBike Performance, which made e-bike drive systems, and Cetitec, a networking software subsidiary that served both Porsche and the wider Volkswagen Group, will also be shut down.
More than 500 people, who are employed at the three subsidiaries, will lose their jobs.
“We must refocus on our core business,” Porsche CEO and Executive Chair Michael Leiters said in a statement. “This is the indispensable foundation for a successful strategic realignment. This forces us to make painful cuts — including our subsidiaries.”
It’s a message that Leiters, who became CEO early this year, first delivered in March when the company announced plans to realign its business. “We will comprehensively reposition Porsche, make the company leaner, faster and the products even more desirable,” he said at the time.
Since then, Porsche has extracted itself from several endeavors, including an agreement reached in April to sell its equity stakes in Bugatti Rimac and Rimac Group to a consortium led by New York-based investment firm HOF Capital.
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Porsche’s electrification efforts got off to a strong start with the Taycan in 2019, but the company soon ran into trouble developing follow-on EVs. The Macan Electric was delayed by nearly two years as software development within Volkswagen’s Cariad division lagged behind expectations.
The entire company has suffered declining sales in key markets, including North America, where sales fell 11%, and China, where deliveries were off 21% in the first quarter of this year. European sales were also down 18%, though they rose slightly in Germany.
Porsche has blamed EV adoption for its woes, though the company’s continued poor performance in China, where electric vehicles have claimed more than half the market, suggests that consumer acceptance of EVs may not be the root cause.
The closure of Cellforce captures the change of fortunes for Porsche’s EV program. The German automaker had originally started the subsidiary to develop and manufacture batteries that would distinguish its EVs from other companies.
“The battery cell is the combustion chamber of the future,” Oliver Blume said in 2022 when he chaired Porsche’s executive board.
After struggling to develop EVs in a timely manner, Porsche has shifted much of its new vehicle efforts to reviving some its internal combustion platforms, which were originally intended to constitute a minority of sales by 2030. The company is still planning to rollout new EVs though, and will soon sunset the gas-powered version of the Porsche Macan. Porsche is expected to bring an all-electric version of the Cayenne, and several variants, to market this year.
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