China’s high-tech EVs are eating Porsche’s lunch

Porsche sales have slipped in China, but the wider implications of the sales decline in the largest car market could be signs of wider-reaching challenges on the horizon if the German automaker doesn’t address the issues at hand.

First things first: Porsche is no longer the dominant luxury player in China amid growing competition from less-expensive, high-tech Chinese vehicles that resemble models produced by German automakers, with a host of tech offerings (via The New York Times).

• Last month, Porsche reported that deliveries in China declined 28% in 2024, with 56,887 units sold for the year. 

• Xiaomi—which manufactures smartphones in China—sold more than 100,000 units of its SU7.

• The all-electric Xiaomi SU7—which the company touts as a “revolutionary EV experience"—features AI tech that is capable of greeting a driver with their favorite song and is nearly half the price of a Porsche Taycan.

Between the lines: The larger impact of Porche’s declining sales in China (for the third year in a row) is having a profound impact on the automaker beyond market share. 

• The German automaker’s total global deliveries were down 3% in 2024, with 310,718 vehicles sold throughout the year. 

• Porsche reportedly plans to shutter 30% of its dealerships in China by the end of 2026, bringing the total number of dealers in China to around 100. 

The silver lining? Despite Porsche’s sales decline in China, the company’s sales in every other major market were up in 2024, including a 1% increase in North America (86,541 deliveries), the automaker’s largest car market. In Europe, Porsche delivered 75,899 cars last year (excluding Germany), up 8% from 2023. Porsche sales in Germany increased 11%, with a total of 35,858. 

Between the lines: Over the past months, Porsche has been working to implement several measures to increase its sales and improve profitability, ranging from modifying its powertrain strategy to plant closures. 

• Porsche is scaling back on its EV plans and recently announced that it will invest a projected $831 million in 2025 into combustion and hybrid powertrains.

• The automaker plans to cut 1,900 jobs in Germany by 2029. a move many attribute to the company's challenges to gain traction in the EV sector.

• In early February, Porsche’s supervisory board announced that it is considering ending finance chief Lutz Meschke's and sales executive Detlev von Platen's contracts early, a result of declining sales. 

Why it matters: For years, Porsche thrived on its brand cachet, but high-tech, lower-cost players are proving that prestige alone may not be enough.

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