Luxury high-performance sports car carmaker Porsche has announced that it is abandoning its electric vehicle targets due to sluggish EV demand. Porsche is the latest in a growing list of established automakers that made ambitious electrification plans but have been forced to scale back amid falling electric vehicle demand and slowed EV uptake. With consumers in most major markets dealing with high interest rates and rising living costs, very few are willing to spend tens of thousands of dollars more for an EV.
Porsche was looking to crack into the luxury EV market with the Porsche Taycan EV, but the German automaker is going back to the drawing board after market demand failed to meet its expectations. The decision to abandon its electric vehicles targets came soon after Porsche warned that the aluminum-parts shortage caused by a flooding incident down the supply chain had impacted its vehicle production line.
As the automotive sector contends with lower-than-predicted electric vehicle demand, Porsche is now ditching its plan to make electric vehicles 80% of its new vehicle sales by 2030. Like many other automakers, Porsche was initially keen on electrifying its vehicle line in record time and pledged to invest considerable resources to achieve this goal. However, Porsche executives now say the carmaker will only pursue electrification based on market demand rather than strict deadlines.
A statement from Porsche said that the electric-vehicle transition would take longer than the company assumed half a decade ago when it set its electrification targets. The company noted that its product strategy would still allow it to sell up to 80% electric vehicles by 2030 if there is enough consumer demand and if electric-vehicle technology advances further. According to a Porsche spokesperson, the automaker is “reflecting the situation” around global e-mobility development rather than cutting its electrification goals.
The global electric-vehicle industry has experienced significant growth over the past decade as climate-change mitigation efforts takes center stage in international politics. Electrifying the world’s road transportation would help to cut greenhouse-gas emissions by nearly 30% and put the world on track to achieving carbon neutrality. As Tesla’s valuation grew by leaps and bounds, established automakers poured vast amounts of money into developing EVs and remained incredibly bullish, despite the high EV prices and insufficient charging infrastructure that hindered EV ownership.
Sluggish electric-vehicle demand in most major markets dealt a major blow to these ambitious electrification plans and left many carmakers with scaled-down strategies that will see them sell internal combustion engine (ICE) cars as well as hybrids and battery electric vehicles (BEVs). Even so, Porsche says it will continue to monitor the EV market and remain flexible so it can react to regulations and consumer requirements in time.
The coming months are likely to reveal how other EV makers such as ElectraMeccanica Vehicles Corp. Ltd. (NASDAQ: SOLO) will adapt to the changing market dynamics in this industry.
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