Porsche’s EV Production Faces Supply Chain Hurdles
Porsche AG issued a warning on Wednesday about the ongoing supply chain issues that are impeding its battery-electric vehicle (BEV) production. The company also indicated slower growth in Europe and China.
Despite these challenges, Porsche remains optimistic about its BEV sales target, attributing this confidence to the resilience of luxury demand during economic downturns.
Lutz Meschke, the Chief Financial Officer of Porsche, highlighted during a media call that the company is experiencing “major challenges” in procuring special parts, such as high voltage heaters. This situation casts doubt on Porsche’s ability to achieve its target of BEVs constituting around 12-14% of total sales, reports Reuters.
Porsche’s CEO, Oliver Blume, echoed these concerns, stating, “There is no week where we have no supply chain issue. We have to be very flexible.” Meschke added that an improved supply situation in the second half of the year is crucial for meeting their EV target.
Despite these challenges, Porsche reported a 10.7% increase in operating profit to 3.85 billion euros ($4.25 billion) for the first half of the year. Revenue also saw a 14% increase to 20.43 billion euros, with deliveries 14.7% higher than last year, indicating a recovery from last year’s output reduction due to lockdowns in China.
However, Porsche foresees a slowdown in the German market and a slower-than-expected recovery in the Chinese market. Despite these predictions, Blume remains optimistic, stating that the luxury market has shown more resilience than the mass market. He also noted that the company has managed to offset higher costs by maintaining consistent pricing on rising sales.
Porsche’s operating return on sales was 19.5% in the second quarter but 18.9% for the first half overall, slightly below last year’s 19.4%.