As Porsche prepares for an initial public offering, they are placing their bets on the future profitability of their EV divisions, Bloomberg reports. Porsche executives are clearly focusing on the EV revolution as a positive situation, not a hurdle to be overcome. Though the exclusively internal combustion engine 911 is currently their most profitable model, that is set to change, as Porsche is telling investors it can become more profitable focusing on battery power.
“Our target is to selectively expand higher-margin segments and to leverage electric-vehicle pricing opportunities,” Porsche CEO Oliver Blume said.
According to the Bloomberg report, Porsche sees more potential to raise prices of its EVs than its combustion engine models. Chief Financial Officer Lutz Meschke said during Porsche’s capital markets day that he sees Porsche’s “EV margins reaching parity with those of combustion vehicles in two years, then expanding because customers are willing to pay more for new technology.”
Porsche reports that it is already well ahead of competitors such as Ferrari and Aston Martin when it comes to electrifying its lineup. But a more meaningful EV ramp-up will take overhauling factories, retraining staff and securing increasingly scarce raw materials for batteries.
Though the exclusively ICE-powered 911 remains Porsche’s most profitable model, They are preparing to introduce an electric version of the popular Macan SUV. Due to supply chain and software issues, the Macan has been delayed and won’t hit showrooms until 2024. According to Bloomberg, Porsche is now trying to chart its own path on software, but the problems still raise concerns about future EV introductions. There’s no launch date yet for the luxury SUV, and executives said little else about the model other than that it will be made in Leipzig, Germany.
Blume told investors he believes Porsche is unique “because the brand holds luxury appeal and benefits from economies of scale—after all, it sold 27 times more cars than Ferrari last year.”
