Despite the growth in electric vehicle sales, Porsche is canceling plans to launch its own battery production. The company stated that the business model proved to be economically unviable due to excessively high costs and a slowdown in the growth of the global electric car market. This is reported by InsideEVs, writes UNN.
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Automaker Porsche has officially abandoned plans to create its own batteries for electric vehicles. Its subsidiary Cellforce, which was supposed to become a production hub, is now scaling back operations and will focus only on research and development.
The decision was explained by the lack of the necessary scale of production and high launch costs.
Due to production volumes and the lack of economies of scale, Porsche is no longer engaged in its own production of battery cells
Although electric vehicles and hybrids already account for 36% of Porsche's global sales, the company acknowledged that global demand is developing slower than predicted. In the US and China – the brand's key markets – the situation was further complicated by political factors: the cancellation of benefits, the weakening of clean energy programs, and a drop in demand. This gives Porsche's gasoline models a chance to stay on the market significantly longer than expected.
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Cellforce managed to start pilot production and development of cells for electric cars, but a full-fledged factory capable of supplying even 10,000 Taycan sedans per year was never created. Instead, the company will focus on cooperation with other Volkswagen Group divisions and V4Smart – a battery manufacturer that already supplies cells for the hybrid 911 GTS.
Porsche's situation is not unique. European startups in this industry face fierce competition from Chinese manufacturers CATL and BYD, which control a significant part of the supply chain and offer batteries at lower prices. The bankruptcy of the Swedish company Northvolt in the US, which failed to achieve the required scale despite billions in investments, was also indicative.
Now the market for electric vehicle batteries is increasingly concentrated in the hands of a few giants, such as CATL, BYD, and LG Energy Solution, while smaller players either leave the business or are forced to change their strategy.
Volkswagen Group, despite Porsche's move, continues to make large-scale investments in its own battery factories in Spain, Germany, and Canada, as well as in next-generation solid-state battery technologies.
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