The numbers landing on Michael Leiters’ desk for his first annual results press conference as Porsche CEO are brutal by any measure. Full-year 2025 operating profit fell 98% from €5.3 billion to just €90 million after €4.7 billion in writedowns tied to the company’s abandoned EV roadmap. Global deliveries dropped 10%. The Taycan sold 16,339 units — down from a peak of 41,296 in 2021. Leiters and CFO Jochen Breckner presented the results on March 11, 2026, framing the strategic pivot in three words: “Leaner, faster, desirable.”

The Fact: Porsche AG reported a full-year 2025 operating profit of €90 million — a 98% collapse from €5.3 billion in 2024 — after booking €4.7 billion in charges tied to its EV strategy reversal.
The Delta: The €2.7 billion goodwill impairment embedded in those writedowns reflects the deflated book value of Porsche’s original EV ambitions on Volkswagen Group’s balance sheet — a number that doesn’t reverse when strategy does.
The Leadership Context: CEO Michael Leiters, who took over January 1, 2026, is presenting his first annual results 10 weeks into the job. His stated direction: focus on high-margin products, cut costs, and rebuild the brand’s desirability.
The Buyer Impact: Porsche’s product lineup is now in active flux. Buyers waiting on the electric 718, a revised Taycan, or a merged Panamera/Taycan nameplate face years of uncertainty while the company stabilizes.

Porsche’s 2025 Financial Collapse Had Three Clear Causes

Porsche’s €4.7 billion in 2025 writedowns are not a one-line accounting entry. The largest single item is a €2.7 billion goodwill impairment reflecting the deflated value of the company’s EV ambitions on Volkswagen Group’s balance sheet. Restructuring charges from the “Push to Pass” cost program add to that total. Tariff-related losses account for roughly €700 million more. Each component reflects a different dimension of the same strategic miscalculation.

The tariff problem is structural. Porsche imports every vehicle it sells in the United States from European factories, making it uniquely exposed to the 15% Trump-era EU auto tariffs. The U.S. is now Porsche’s largest market. Having no American manufacturing — previously positioned as European exclusivity — became an €700 million annual liability in 2025 with no quick fix available. Building a U.S. plant would take years and cost billions the company cannot currently commit.

China is the second failure. Deliveries fell 26% through the first nine months of 2025 year-over-year as Chinese buyers shifted to domestic brands offering comparable or superior technology at dramatically lower prices. Porsche shut down its proprietary China charging network in December 2025, a move that stripped away one of the last tangible premium differentiators the Taycan had over local rivals. That network goes dark starting this month.

The third cause is the EV platform write-off itself. Porsche is now reverse-engineering the PPE Sport platform it spent billions designing as EV-only — adding combustion engine capability back into a chassis that was deliberately built without space for a central tunnel, fuel tank, or exhaust routing. Porsche is re-engineering a platform it spent billions designing to exclude combustion. That is an engineering admission that the original premise was wrong.

Leiters Frames the Reset: “Leaner, Faster, and Even More Desirable”

The phrase Porsche’s newsroom chose for Leiters’ first annual results is deliberate. “Leaner, faster and even more desirable” maps directly onto the three problems the new CEO inherited: an oversized cost base, a product pipeline that moved too slowly against Chinese competition, and a brand that has lost some of the aspirational pull that once justified its pricing.

The high-margin product focus is where the strategy gets concrete. Porsche’s most profitable vehicles have always been its sports cars — the 911 variants, the GT4 RS, the Cayenne Turbo. The Taycan was supposed to join that tier. At 16,339 global deliveries in 2025, Taycan sales are now so low that Porsche is reportedly weighing whether to merge the Taycan and Panamera into a single model line to eliminate duplicate development costs. That is the opposite of a high-margin expansion play.

Leiters’ background gives some clues about where this leads. He spent 13 years at Porsche from 2000 to 2013 working on the Cayenne and Macan SUV programs — the two models that pulled Porsche out of near-bankruptcy in the early 2000s. Those SUVs succeeded because they delivered genuine performance differentiation in a growing segment at prices buyers accepted. The formula was simple: build something customers genuinely want, price it honestly against what it delivers, and don’t over-promise on the technology.

The 2026 Cayenne Electric, which starts at $111,350 and tops out at $165,350 for the Turbo Electric, is the clearest current expression of that philosophy applied to EVs. It carries 1,139 horsepower, 400 kW DC fast charging, and regenerative braking technology derived directly from Porsche’s Formula E program. If there is a high-margin EV product in Porsche’s lineup right now, that is it. Whether customers agree with the price is another question.

The 718 and Taycan Situations Show How Complicated “Desirable” Actually Is

Leiters’ “desirable” objective is harder than it sounds when two of Porsche’s EV nameplates are in crisis simultaneously.

The Taycan’s volume collapse is the most visible problem. A 60% drop from peak — from 41,296 units in 2021 to 16,339 in 2025 — is not a market softness story. It reflects specific competitive displacement in China and a pricing structure that no longer commands the premium it once did. Porsche has already backed away from its 80% EV sales target by 2030, abandoned the original all-electric-first roadmap, and is now running a mixed-powertrain strategy across virtually every model line.

The 718 situation is different but equally messy. Porsche Cars Australia managing director and CEO Daniel Schmollinger confirmed this week that he has driven the electric 718 Boxster prototype, calling it “amazing” with a “very go-kart-y feeling.” That is the most concrete confirmation yet that the electric 718 is still a real, driveable product targeting an early 2027 debut. Porsche is simultaneously engineering combustion variants back into the same platform, but those 718s won’t arrive until late in the decade at the earliest — leaving a multi-year gap where no new gas-powered 718 exists.

Desirability is also a China-specific problem that pricing and product alone can’t fix. European luxury brands are broadly losing ground in China as domestic automakers compress development cycles from eight-plus years to under two and deliver competitive technology at prices that make the premium German brands look expensive rather than aspirational. Porsche’s brand equity still exists in China, but it no longer automatically converts into transaction price tolerance.

2026 Outlook: Margin Recovery Hinges on Products That Aren’t Out Yet

Porsche’s path to margin recovery in 2026 depends heavily on the Cayenne Electric ramping into full deliveries from summer 2026 onward, continued 911 strength, and whether the cost cuts from “Push to Pass” flow through to the bottom line faster than new development spending offsets them.

The Volkswagen Group, Porsche AG’s majority shareholder, posted its own €1.3 billion operating loss in Q3 2025, meaning Porsche’s recovery timeline affects its parent’s finances directly. VW has its own cost-cutting and restructuring agenda running in parallel, and both companies are trying to rebuild profitability in a macro environment that hasn’t materially improved since Leiters took over.

The tariff situation remains unresolved. U.S. manufacturing is years away at minimum. China isn’t coming back quickly. And the Taycan, Porsche’s only EV-exclusive nameplate, is now a shrinking contributor to revenue rather than a growth driver. Leiters’ “leaner” agenda at least addresses the cost side. The “desirable” agenda — rebuilding volume in declining segments — is a longer project.

EVXL’s Take

Leiters’ framing — “leaner, faster and even more desirable” — is smart messaging for a brand that needed to say something other than “we spent four years and billions of euros on a strategy that didn’t work.” But it’s worth being direct about what this annual results presentation actually is: the final accounting of a failed EV bet, delivered by a new CEO who had no part in making it.

I’ve been tracking this deterioration since the Q3 2025 quarterly loss — Porsche’s first in its history as a public company — and the full-year numbers confirm what that quarter signaled. The €4.7 billion writedown isn’t a one-off charge. It’s the balance sheet acknowledgment that the assets Porsche built during its EV-first era are worth far less than what was paid for them. You can’t write that back up. You can only build new things that are worth more.

The Cayenne Electric is the most credible near-term candidate. Technically, it’s genuinely impressive — the Formula E-derived 600 kW regenerative braking system isn’t marketing spin, and 400 kW charging in an SUV is a real achievement. Whether enough buyers choose it at $111,350 to $165,350 over the gas Cayenne at $88,800 is the question 2026 deliveries will answer.

On the Taycan and 718: I don’t expect a clean resolution in 2026. The Taycan/Panamera merger discussion is real, and a 2027 announcement of Taycan nameplate retirement wouldn’t surprise me. Used Taycans are already soft on transaction prices. An official end-of-life announcement would push them down another 10 to 15%. If you own one, watch the Leiters product announcements carefully over the next 18 months.

Leiters knows how to build high-margin Porsches. The Cayenne and Macan programs he worked on in the 2000s saved this brand once. The question is whether the same discipline applies when the premium EV market is far more competitive than the premium SUV market was in 2002. I’m cautiously optimistic on the Cayenne Electric. I’m much less confident about Porsche’s EV-only models surviving in their current form past 2028.

Source: Automotive News — Porsche targets high-margin products in strategic reset after 2025 tailspin

Editorial Note: AI tools were used to assist with research and archive retrieval for this article. All reporting, analysis, and editorial perspectives are by Haye Kesteloo.