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TimesLIVE
29-04-2025
- Automotive
- TimesLIVE
Porsche cuts full-year outlook, warns of further uncertainty on US tariffs
German luxury sports car maker Porsche slashed a series of forecasts for 2025, hit by a toxic mix of weakness in its main market China, rising supply chain costs and US tariffs that are disrupting the global car industry. Porsche late on Monday said US import tariffs, in place since April at 25%, weighed on its business in April and May, and warned its adjusted outlook does not factor in the future effects of tariffs. "It is not yet possible to make a reliable assessment of the effects for the financial year," Porsche said. The US tariffs are expected to raise car prices by thousands of dollars, reducing demand and hurting job growth, rattling an automobile industry struggling with a slowing transition to electric vehicles. In April, Porsche, which has no US production, said it had shipped added inventory to the US to get ahead of tariffs and kept prices constant for orders made in March. Porsche said it expects revenues of between €37bn (R781,101,080,000) and €38bn (R802,519,720,000) in 2025, down from its previous forecast of €39bn (R823,638,660,000) to €40bn (R844,799,600,000). Its profit margin is forecast to plunge to 6.5& to 8.5%, down from a previous forecast of 10% to 12%. According to the average analyst estimate in LSEG, Porsche's operating margin is seen at 9.7% on revenues of €38.8bn (R819,455,612,000). The carmaker, which at its stock market debut in 2022 had a higher valuation than its parent company, Volkswagen AG, has fallen from grace since, struggling in particular with low sales in China, its top market, where first-quarter sales dropped 42%. Bill Russo, CEO of Shanghai-based advisory firm Automobility, said Chinese customers of electric cars had been drawn to their domestic brands because of their improved technological offering. "No foreign company believed the Chinese could somehow build equity that was superior to the foreign brands, specially the Europeans," he said. Porsche also said it would no longer pursue plans to expand high-performance battery production at its Cellforce subsidiary, and cited a decline in demand in China for all-electric luxury cars.
Time of India
29-04-2025
- Automotive
- Time of India
Porsche cuts full-year outlook, warns of further uncertainty on US tariffs
German luxury sports car maker Porsche slashed a series of forecasts for 2025, hit by a toxic mix of weakness in its main market China, rising supply chain costs and U.S. tariffs that are disrupting the global car industry. Porsche late on Monday said U.S. import tariffs, in place since April at 25%, weighed on its business in April and May, and it warned that its adjusted outlook does not factor in the future effects of tariffs. "Currently it is not yet possible to make a reliable assessment of the effects for the financial year," Porsche said. The U.S. tariffs are expected to raise car prices by thousands of dollars, reducing demand and hurting job growth, rattling an automobile industry already struggling with a slowing transition to electric vehicles. In April, Porsche, which has no U.S. production, said it had shipped added inventory to the United States to get ahead of tariffs and kept prices constant for orders made in March. Porsche said it now expects revenues of between 37 billion and 38 billion euros in 2025, down from its previous forecast of 39 billion to 40 billion euros. Its profit margin is forecast to plunge to 6.5-8.5%, down from a previous forecast of 10-12%. According to the average analyst estimate in LSEG, Porsche's operating margin is seen at 9.7% on revenues of 38.8 billion euros. The carmaker, which at its stock market debut in 2022 had a higher valuation than its parent company, Volkswagen AG , has fallen from grace since, struggling in particular with low sales in China, its top market, where first-quarter sales dropped 42%. Bill Russo, CEO of Shanghai-based advisory firm Automobility, said Chinese customers of electric cars had been drawn to their domestic brands because of their improved technological offering. "No foreign company believed that the Chinese could somehow build equity that was superior to the foreign brands, especially the Europeans," he said. Porsche also said it would no longer pursue plans to expand high-performance battery production at its Cellforce subsidiary, and it cited a decline in demand in China for all-electric luxury cars. Porsche is scheduled to release first-quarter results later on Tuesday.
Yahoo
16-02-2025
- Automotive
- Yahoo
Tesla is suing critics and customers in China alike—and can count on its ties to the regime to tip the scales in its favor
Tesla is victorious in almost every court case thanks to a justice system that acts as the long arm of the Chinese Communist Party. "The odds are stacked against you,' the founder of Shanghai-based advisory firm Automobility told the AP. Tesla has adopted an unusual strategy to defend its brand from critics in China. According to an investigation by The Associated Press, the carmaker has sued more than a dozen journalists and even its own customers, weaponizing a legal system that operates as an extended arm of the Communist Party regime. In every case where a ruling has ensued, Tesla won its lawsuit. One of the few open cases remains—related to Zhang Yazhou, more on that below—and that is only because she is appealing the verdict handed down against her. Moreover, of the 81 civil judgements in which Tesla owners sued the company over safety and quality issues or contract disputes, only nine were victorious. 'The odds are stacked against you,' Bill Russo, founder of Shanghai-based advisory firm Automobility, told the AP. 'It like going to the casino and winning every hand.' Zhang is famous for clambering on top of a Tesla in 2021 during the Auto Shanghai, one of the world's biggest motor shows, to warn potential car buyers that its cars' brakes can fail. She was in the passenger car seat earlier that year when an accident occurred that she blamed on Tesla, which sent her parents to the hospital with injuries. Capturing headlines across the industry, the stunt briefly sparked conspiracy theories among Tesla investors that either the Communist Party or a local competitor like Nio had put her up to it in an effort to besmirch the brand. Tesla subsquently sued her for defamation and won, with a Chinese court ordering her to pay more than $23,000 in damages and apologize publicly for her accusation. Musk can count on a powerful ally. China's second-highest ranking official behind president Xi Jinping is none other than the man that helped Elon Musk build his massive Chinese vehicle factory: state premier and former Shanghai party boss Li Qiang. While Tesla doesn't break down its actual production numbers, the manufacturing plant has a capacity of more than 950,000 units, according to the company. Fully utilized, that would likely make it the largest single site in the global industry. More than ever, Tesla is dependent on China for sales now that key markets including California and Europe show its car business is under severe pressure. It's not unusual for automakers to see cyclical peaks and troughs that coincide with their product cadence. In order to at least preserve its claim to being a growth stock, Tesla has sacrificed profits for volume, with its fourth-quarter automotive gross margin dropping to its lowest level in five years. UBS estimates sales of fully electric vehicles in China will grow 5% to 7.62 million vehicles this year. That means out of the 14.2 million EVs sold worldwide, more than every second will go to a Chinese customer. Although third-party data shows Tesla's vehicle sales in China increased last year, its business there suffered a decline in revenue both in absolute value expressed in dollars as well as its importance relative to consolidated turnover. Tesla China saw its top line shrink 3.7% to $20.9 billion in 2024, according to the company's 10-K filing, with the country dropping a percentage point to make up 21.4% of group-wide sales. While its accounts do not explain why, it is almost certainly a reflection of the ongoing price war that has forced manufacturers like Tesla to offer a steady stream of rebates to prop up volumes. Zhang, for her part, didn't say whether she would remain with Tesla, but chances are the disgruntled owner will switch to one of the many domestic competitors like BYD. She's also appealing the defamation ruling against her. 'I refuse to accept it,' Zhang told the AP. 'As a consumer even if I said something wrong, I have the right to comment and criticize.' This story was originally featured on Sign in to access your portfolio
