Operating Profit Drops 92% — What’s Happening to Porsche?

Porsche is facing unprecedented challenges.

The financial results for Porsche AG in fiscal 2025 were shocking. Revenue fell sharply from about ¥7.33 trillion to approximately ¥6.64 trillion, while operating profit plunged a staggering 92%, from roughly ¥1.032 trillion to just ¥75.6 billion. Global sales also dropped 10.1% year-over-year to 279,449 units. Porsche’s market share in China shrank from 18% to 15%, and additional costs from U.S. tariffs alone reached around ¥128 billion. Furthermore, a strategic product realignment tied to the EV roadmap cost roughly ¥440 billion, and battery-related expenses added another ¥128 billion, totaling about ¥714 billion in special charges. Based on the numbers alone, Porsche’s once untouchable “high-profit brand” image seems a distant memory.

At the helm amid this crisis is the new CEO, Michael Leiters, who joined after stints at Ferrari and McLaren. He unveiled the centerpiece of the company’s mid-to-long-term vision, “Strategy 2035,” at the recent annual press conference. Reviewing its details left me with mixed feelings of hope and concern.

Strategy 2035 — Choosing Growth “Upwards”

Leiters’ recovery plan can be summed up as a strategy to “grow upwards.”

During the press event, he explained plans to “expand the product portfolio by entering higher margin segments.” Specifically, he hinted at launching a flagship sports car positioned above the 911, and a large SUV “K1” above the Cayenne. The K1 will share its platform with the Audi Q9 and is expected to offer V8 twin-turbo and V6 engine options. The next-generation Macan ICE (internal combustion engine) model will be based on the Audi Q5’s PPE platform in a deal valued around ¥183 billion. This approach emphasizes thorough parts sharing with the Volkswagen Group to reduce development costs.

Leiters also confirmed extending the lifespan of internal combustion and hybrid powertrains, signaling a clear shift from the previous all-in EV stance—a move I welcome. However, the core of “growing upwards” raises important questions.

Remember Ferry Porsche’s Words

“I looked for a small, lightweight, energy-efficient sports car that fit my ideals but couldn’t find one anywhere. So, I decided to make it myself.”

These words from Porsche’s founder Ferry Porsche embody the brand’s original spirit, I am convinced. Small, light, efficient—and most importantly, a sports car you can drive every day. One that takes you to work during the week yet thrills you on the track come weekend. That was Porsche’s identity.

Sure, supercars like the 959, GT1, Carrera GT, and 918 Spyder have existed before. But those were special showcases — technological masterpieces set apart from the everyday lineup. The plan to establish a permanent flagship model above the 911 is fundamentally different. It means Porsche is becoming a brand that routinely “shows off” its pinnacle, even in daily use.

Is Porsche Turning Into an Investment Asset Manufacturer?

Here I share my candid concerns.

Positioning a flagship permanently above the 911 places Porsche in the supercar arena. Vehicles to be admired like art, expected to appreciate as investments, and tucked away in garages. Is that truly what Porsche should be making?

It increasingly feels that shareholder priorities, revenue growth, and boosting profit margins have become the top agenda.

What I personally hope for is quite the opposite. Make the 911 more compact. Tone down the power a little. There’s no need to race supercars for horsepower or shave a tenth off 0-100 km/h times. The true mission of Porsche should be to perfect a sports car that’s genuinely fun yet unquestionably fast. Our household owns several Porsches ranging from air-cooled classics to EVs, but none can be fully described by specs alone — each encapsulates pure driving pleasure. The essence of Porsche lies in the “conversation” that begins the moment you grip the steering wheel.

I don’t dismiss those who enjoy Porsche as a high-end collectible. But the deeper you understand the company’s history and vehicles’ essence, the clearer it becomes that Porsche is not that kind of manufacturer. While I respect Leiters’ leadership, I urge the brand not to forget Ferry Porsche’s origins. Porsche’s true spirit is found in sports cars that make your heart race just by driving on ordinary roads.