Porsche halts Cellforce battery production amid slower demand, shifts unit to R&D

Porsche is ending in-house battery cell production at its Cellforce subsidiary and converting the unit into a dedicated R&D operation, citing insufficient volumes, lack of economies of scale, and tougher conditions in the U.S. and China. Roughly 200 of 286 jobs at the Kirchentellinsfurt site are expected to be cut, with some potentially absorbed by Volkswagen’s PowerCo, reports AutoBlog.

EV battery strategy pivots to R&D

Porsche says it will no longer pursue high-volume battery cell manufacturing and will focus Cellforce on cell and system development to support performance EV programs while relying on external suppliers for production at scale. Company statements link the decision to a slower ramp of electromobility and regional headwinds that prevent achieving targeted costs without global volume, reinforcing a broader strategic realignment.

Job cuts and workforce impact

About 200 of Cellforce’s 286 employees face layoffs at the Kirchentellinsfurt site, with a smaller R&D team expected to remain as the unit restructures. Porsche says staff reductions will be handled “socially responsibly,” and that PowerCo will introduce suitable candidates to roles, though precise allocations were not disclosed.

Uneven EV demand across regions

Porsche emphasizes that electrification remains essential, noting an approximately 57% electrified sales mix in Europe in H1 2025, while demand in the U.S. and China has been weaker than anticipated for the luxury EV segment. Management points to changed framework conditions in these markets, combined with insufficient global volumes, that make proprietary scaling of cell plants uneconomic at present.

Production plans shelved, projects refocused

Earlier ambitions for a Baden‑Württemberg “start‑up factory” and larger follow-on site had already been paused in April; the latest move formalizes the halt to production expansion and concentrates efforts on high-performance battery R&D instead. Porsche also signaled that Cellforce know‑how may support related group battery initiatives while core EV models proceed with supplier-based cells.

Products continue, with supply shift

Porsche says EV programs remain on track, with Taycan and Macan EV in market and future electric variants planned, but it will prioritize performance differentiation via development rather than vertically integrated cell manufacturing. The approach mirrors a wider European recalibration as automakers balance cost, regulation, and customer uptake, particularly in premium segments where volumes are not yet sufficient to justify dedicated in-house cell plants.

EVXL’s Take

The pivot separates performance know‑how from ownership of cell factories: focusing on R&D can sharpen product competitiveness now, but greater supplier dependence may constrain margins and supply security if demand rebounds. For enthusiasts, the shift could prolong ICE and hybrid icons while EVs benefit from rapid cell innovation sourced externally—yet it raises whether premium volumes will justify proprietary plants before the next capex cycle. How this affects Europe’s goal of domestic battery sovereignty—and Porsche’s leverage in the supply chain—deserves close watch; share perspectives in the comments.

Photos courtesy of Porsche