The reason why Porsche is losing billions: The car manufacturer’s stunning financial collapse
Porsche’s fortunes took a turn for the worst reporting a $1.1 billion loss in the third quarter of 2025 as it faces headwinds from various directions.
Porsche Chief Financial Officer Jochen Breckner shared over a earnings call Friday that the car manufacturer had an operating loss of $1.1 billion in the third quarter of 2025. That is a striking turnaround for the company which reported a nearly similar amount in gains just the year before.
The dramatic U-turn in profits was the result of headwinds the luxury carmaker is facing and difficulties along a rough road transitioning to electric vehicles. However, the company has proposed changes to improve profitability in the new year with Breckner declaring, “we expect 2025 to be the trough.”
Porsche navigating obstacles to profitability
The high-performance sports car manufacturer doubled down on its shift to EVs in 2024. However, in September this year, Porsche announced that it was reversing course on its aggressive transition, keeping existing internal combustion engine models available for longer and offering new models as ICEs and plug-in hybrids.
“We are currently experiencing massive changes within the automotive environment. That’s why we’re realigning Porsche across the board,” said CEO Oliver Blume in a statement. “In doing so, we want to meet new market realities and changing customer demands – with fantastic products for our customers and robust financial results for our investors.”
Some of the “massive changes” Blume was referring to include diminishing demand for EVs and weak sales in Europe, North America and especially China. Additionally, the company has had to deal with bottlenecks in the supply chain and US tariffs that Trump has imposed on imports into the United States.
The EV rollback has hit Porche’s bottom line hard in the past quarter. The car manufacturer expects to take a $3.6 billion hit on earnings over the full year from costs related to the overhaul and restructuring, reports CBT News.
Some of the changes the company will implement include Blume handing over the reins at Porsche to former McLaren CEO Michael Leiters at the beginning of 2026. This will end Blume’s controversial dual role as CEO of the luxury car brand and its parent company Volkswagen AG.
Porsche also plans to reduce its permanent headcount by 1,900 in the coming years. As well, in order to avoid further job cuts it will seek to negotiate salary levels and get rid of employee perks.
Investors welcomed the news pushing the company’s share price to its highest level since May on Monday.
Related stories
Get your game on! Whether you’re into NFL touchdowns, NBA buzzer-beaters, world-class soccer goals, or MLB home runs, our app has it all.
Dive into live coverage, expert insights, breaking news, exclusive videos, and more – plus, stay updated on the latest in current affairs and entertainment. Download now for all-access coverage, right at your fingertips – anytime, anywhere.
Complete your personal details to comment