Porsche Warns of Supply Chain Problems Impacting BEV Production and Slower Growth
- Shams Ul Zoha
- July 26, 2023
- 4:51 pm
WHAT YOU SHOULD KNOW
- Porsche AG is experiencing significant supply chain problems, especially in securing specialized parts like high voltage heaters for its battery-electric vehicles (BEVs).
- Despite the supply chain disruptions, Porsche remains optimistic about the luxury market’s resilience, as it believes luxury demand is more resistant to downturns compared to the mass market.
- Porsche reported a 10.7% increase in operating profit to 3.85 billion euros for the first half of the year, with deliveries up 14.7% compared to last year.
Porsche AG issued a warning about the impact of supply chain issues on its battery-electric vehicle (BEV) production, leading to slower growth in Europe and China. Despite these challenges, the carmaker remains committed to its BEV sales target, relying on the resilience of luxury demand during economic downturns. Chief Financial Officer Lutz Meschke highlighted the difficulty in securing specialized parts like high voltage heaters, which could hinder Porsche’s goal of having BEVs account for approximately 12-14% of total sales.
The supply chain problems have become a recurring issue, with Chief Executive Oliver Blume acknowledging that there is not a single week without such challenges. To achieve their EV targets, Porsche recognizes the urgent need for an improved supply situation in the latter half of the year. Despite the setbacks, the company reported a 10.7% increase in operating profit for the first half, reaching 3.85 billion euros. Deliveries also showed a recovery from last year’s disruptions, rising by 14.7%, indicating some resilience in the face of the pandemic’s impacts.
Porsche anticipates a potential slowdown in the German market, even with strong growth recorded this year. The luxury market, however, is expected to fare better compared to the mass market, allowing the company to offset higher costs by maintaining consistent pricing on rising sales. While the operating return on sales was 19.5% for the second quarter, slightly below the previous year’s figure, Porsche aims to navigate these challenges and continue its pursuit of EV sales targets and sustained profitability.
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