Volkswagen AG’s VWAGY subsidiary, Porsche, has delayed its electric vehicle rollout amid weaker demand, challenges in China and higher U.S. tariffs. The shift has prompted both Porsche and Volkswagen to reduce their profit forecasts for 2025.
Per Oliver Blume, CEO of Volkswagen, the automotive industry is undergoing major changes, and Porsche is being realigned to address evolving market conditions and customer preferences.
As part of the new strategy, the upcoming SUV positioned above the Cayenne, originally planned to launch as a fully electric model, will now debut only with combustion engine and plug-in hybrid options. Similarly, the Panamera and Cayenne will continue to be offered with combustion and hybrid variants well into the 2030s. New successor generation models have been added to the company’s cycle plan.
The delay in EV adoption means certain all-electric models will be launched later than planned. Porsche is also rescheduling the development of its next-generation EV platform planned for the 2030s. It is redesigning the new platform in coordination with other Volkswagen Group brands. This adjustment reflects slower-than-expected demand for high-end battery-electric vehicles. Porsche continues to refresh its current EV lineup, including the Taycan, Macan, Cayenne and the upcoming two-door sports car in the 718 segment.
Rescheduling the EV platform will trigger depreciation and provisions that could weigh on 2025 operating profit by up to €1.8 billion. Since Porsche’s earlier 2025 guidance did not factor in these costs, the company has revised its outlook. It now expects a positive sales return of up to 2%, down from the previous estimate of 5-7%. It is now targeting a medium-term operating return on sales in the low double digits, aiming for solid business growth of up to 15%, which is on the lower side of its earlier guidance of 15-17%. It expects automotive EBITDA margin of 10.5-12.5%, down from the previous estimate of 14.5-16.5%. Per Reuters, Volkswagen has also lowered its profit margin forecast to 2-3% compared with the previous guidance of 4-5%.
VWAGY’s Zacks Rank & Key Picks
Volkswagen carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks in the auto space are Dorman Products, Inc. DORM, China Yuchai International Limited CYD and PHINIA Inc. PHIN, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for DORM’s 2025 sales and earnings implies year-over-year growth of 7.9% and 22.7%, respectively. EPS estimates for 2025 and 2026 have improved 3 cents and 19 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for CYD’s 2025 sales and earnings implies year-over-year growth of 54.1% and 87.7%, respectively. EPS estimates for 2025 have improved 58 cents in the past 60 days.
The Zacks Consensus Estimate for PHIN’s 2025 earnings implies year-over-year growth of 18.1%. EPS estimates for 2025 and 2026 have improved by 39 cents and 21 cents, respectively, in the past 60 days.
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Dorman Products, Inc. (DORM): Free Stock Analysis Report China Yuchai International Limited (CYD): Free Stock Analysis Report Volkswagen AG Unsponsored ADR (VWAGY): Free Stock Analysis Report PHINIA Inc. (PHIN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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