Porsche boss rejects EV sceptic label as ‘unfair’

{"text":[[{"start":7.56,"text":"Porsche’s new chief executive has pushed back against concerns that the German sports-car maker was overcorrecting its electric strategy, arguing that it was “unfair” to label him an EV sceptic."}],[{"start":19.52,"text":"Since taking the helm of Porsche in January, Michael Leiters has slimmed down the Volkswagen-owned group to focus on developing new petrol models to revive profits hit by its ultra-ambitious shift to EVs."}],[{"start":32.62,"text":"To offset plummeting sales in China, Leiters is seeking to revive Porsche’s profits with a new combustion engine version of its best-selling Macan in 2028. For its new K1 luxury SUV, Leiters said the company had not decided which engines to choose, but added that there was “still more appetite for petrol cars” in the upper segments."}],[{"start":null,"text":"

"}],[{"start":53.62,"text":"The costly and lengthy product reshuffle — combined with Leiters’ well-known reservations on EVs — has raised some concerns about Porsche’s long-term EV strategy at a time when Chinese premium carmakers are trying to make inroads into Europe."}],[{"start":67.94,"text":"However, Leiters told the FT, in his first interview with the international media, that his reputation as an EV sceptic was unjustified."}],[{"start":75.96,"text":"“I think that’s unfair,” he said, adding: “We have to recover our petrol strategy, but I’m very positive that once we have the Macan with the petrol engine, we have a very balanced offer for our customers on electric and petrol cars.”"}],[{"start":90.02,"text":"The company is still going ahead with the electric version of its 718 sports car, which was already being developed when he took over. Still, when it comes to its signature 911 model, Leiters insists that “there won’t be a 911 electric”."}],[{"start":104.08,"text":"Porsche started scaling back its EV strategy before Leiters was appointed. However, those who have worked with him have noted that he had long seemed unconvinced that demand for electric models would take hold at the luxury end of the market. During his time as McLaren chief executive, Leiters told the FT that EV technology was not ready for sports cars."}],[{"start":null,"text":""}],[{"start":124.8,"text":"Analysts have cautioned that Leiters needs to strike the right balance between reviving the popular petrol-selling models while ensuring that Porsche does not fall behind in the longer-term EV transition that is now increasingly led by BYD and other Chinese carmakers."}],[{"start":141,"text":"“We have to be careful,” Leiters said to ensure that the company was not making a “double investment” in petrol and EVs in the same vehicle segment. “That is one of the tricky questions for our future.”"}],[{"start":153.18,"text":"In the case of Macan, for example, the consumer feedback has been explicit. Sales of the electric version fell 40 per cent year on year during the first half, while the combustion version rose 2 per cent, even as Porsche had stopped selling the petrol model in Europe over a failure to comply with EU cyber security regulations."}],[{"start":173.28,"text":"Leiters said he was not concerned that Porsche would fall behind in EVs, especially with its access to VW’s technologies. Leiters said achieving cost parity between EVs and petrol models in the short term was unlikely, meaning higher EV sales would continue to be dilutive to Porsche’s margins."}],[{"start":191.48,"text":"Since taking over as chief executive, the German boss has streamlined non-core assets and reached a deal with unions to cut 9,000 jobs — or roughly 20 per cent of its workforce — by 2035."}],[{"start":null,"text":""}],[{"start":204.16,"text":"Leiters said the company needed to “dramatically” reduce its sales ambitions and scale, saying it had become “overblown” during two decades of growth fuelled by China demand."}],[{"start":214.24,"text":"“With a difficult environment, we have to rethink our business model and the scale of our organisation,” he added."}],[{"start":221.42,"text":"At its capital markets day next week, Leiters is expected to set out a far more realistic outlook on China, while he will “dramatically lower” its break-even point compared with when it had annual vehicle deliveries of about 320,000 and an operating profit margin of 18 per cent in 2023. Last year, its margin plunged to 1.1 per cent on sales of roughly 280,000 cars due to its China performance and costly retreat from EVs."}],[{"start":250.88,"text":"Despite the swift restructuring measures Leiters has undertaken, sales in China have continued to suffer with deliveries falling 32 per cent in the first half. Volkswagen also recently issued a profit warning, blaming a €6bn writedown on the valuation of its stake in Porsche and a slowdown in the world’s largest car market."}],[{"start":270.84,"text":"Leiters said there were no additional job cuts planned and medium-term operating profit margin targets were unchanged at between 10 and 15 per cent, but warned China would continue to pose “a huge challenge”."}],[{"start":283.22,"text":"He predicted “an incredible inflation of product launches” in the Chinese market, with about two new products being rolled out every day. He called it “self-destroying” and predicts consolidation, but added, “the question is, how long will it take?”"}],[{"start":null,"text":""}],[{"start":298.16,"text":"Leiters has shut down the group’s electric bike, batteries and software subsidiaries, while selling off its IT consulting business to Tata Consultancy Services. Earlier this month, Porsche also raised about €1bn, selling its stakes in Bugatti Rimac — its joint venture with electric hypercar maker Rimac — and the Rimac Group."}],[{"start":318.08,"text":"Porsche still faces a major product gap until the new petrol version of the Macan is ready in 2028. In the meantime, Chinese rivals such as BYD and Xiaomi are seeking to break into the premium market long dominated by German players."}],[{"start":332.92,"text":"Porsche and other German manufacturers would be able to match Chinese speed and cost, Leiters said, were it not for the big gap in labour and energy costs, as well as Europe’s regulatory environment."}],[{"start":343.14,"text":"“Fix that and we will be there,” he said, adding the strengths of European manufacturers should not be underestimated. “If we have an even playing field, we don’t have to fear any competition.”"}],[{"start":359.32,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1790749402_8919.mp3"}