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Porsche goes counter to industry with planned price hike

Credit: Porsche AG

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Porsche has announced that it will be dramatically increasing the price of its vehicles, specifically its upcoming EVs.

Price cuts have quickly become a defining feature of the first quarter of this year. Perhaps the best example of this movement has been the Chinese market, where brands have been slashing thousands off the price of new EVs.

However, this also extends to western markets, where Tesla has initiated a downward movement.

Counterintuitively, Porsche now plans to do the exact opposite, increasing prices by 10-15 percent on some upcoming EVs, according to a report from Autocar.

The announcement of the price increase comes from the company’s CTO delivering a message to investors regarding the premium German automaker’s goal of achieving a profit margin of 20% in the coming years. Porsche reported yesterday that it had reached a record 18% profit margin last year, and it now looks to double down on those gains.

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“We will see significant price increases in the middle of the year for the new model year. That will help a lot to make sure we make strong group operating margins,” said Lutz Meschke, Porsche’s Chief Finance Officer, in his message to investors. “We set ourselves a very ambitious goal when it comes to group return on sales of 17-19 percent in the mid-term, and that means we have to reach parity between BEV and ICE as soon as possible, otherwise, this forecast wouldn’t work.”

The models primarily affected by the price increase will be upcoming EVs, which will be 10-15 percent more expensive than ICE variants. This includes the Porsche Macan EV, 718 EV, Cayenne EV, and the upcoming unnamed larger electric SUV sibling of the Cayenne. Porsche’s CFO didn’t mention if these price increases will also affect the Porsche Taycan, but if the brand hopes to continue to grow profit margins, it may have no other choice.

Porsche does not believe that demand will be affected by the substantial price increase, thanks in large part to the marketing success the brand has had.

Besides the recent trend of price cuts, Porsche is technically following the long-lasting trend within the auto industry of increasing vehicle prices yearly, even if they plan to do so far more dramatically.

This price hike coincides with a peak in R&D investment from the company, primarily into EV technology and sustainable fuel production, which Porsche has become the champion of.

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Strangely, the new price hike comes as the brand hopes to achieve 50 percent EV sales by 2025, which could be particularly difficult if brands like Tesla continue to cut prices and offer compelling vehicles. Furthermore, Porsche is going counter to its traditional rivals, including BMW and Mercedes, who have introduced price cuts in China and have been forced to implement similar (if less aggressive) price adjustments in western markets.

Porsche has likely gained significant confidence following its 2022 earnings report, in which it reported record earnings and continued growth of vehicle sales, up 2.6 percent compared to the previous year.

The reaction from Porsche investors has been mixed. While still elevated from its IPO price late last year, Porsche stock has fallen slightly following the announcements over the past few days. However, as Porsche has not yet instituted its price hikes, it is impossible to predict how the car market or investors will react in the long run, especially as the brand continues to grow in popularity, particularly within the enthusiast market.

What do you think of the article? Do you have any comments, questions, or concerns? Shoot me an email at william@teslarati.com. You can also reach me on Twitter @WilliamWritin. If you have news tips, email us at tips@teslarati.com!

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Will is an auto enthusiast, a gear head, and an EV enthusiast above all. From racing, to industry data, to the most advanced EV tech on earth, he now covers it at Teslarati.

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Tesla’s biggest rival in China reported a big profit decline once again

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(Credit: BYD)

Tesla’s biggest rival in China reported a big decline in its profitability for the second straight quarter, and a loss of one-third compared to the same quarter last year.

BYD overtook Tesla as the best-selling EV maker in China in the fourth quarter of 2023, finally surpassing the company in terms of sales in the region.

Is Tesla really losing to BYD, or just playing a different game?

The Chinese market is one of the most competitive in the world, especially for EVs, as the industry is healthy with young and scrappy companies looking to sell the best possible tech in their vehicles.

BYD reported its earnings on Thursday and said that its profit had slumped by 33 percent compared to the same quarter last year. For this year’s third quarter, BYD reported a net profit of 7.8 billion yuan ($1.1 billion), a 32.6 percent decrease compared to the same period in 2024.

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Its revenue was 195 billion yuan ($27.4 billion), which was only a 3 percent decrease compared to Q3 2024.

The drop in profits and revenue can mostly be attributed to the ongoing growth of competition in the Chinese market. The increased competition in China has pushed companies to turn to overseas markets in response, according to CnEVPost.

BYD is one of those companies, and it is attempting to push sales upward by entering new markets, especially in Europe, where the company sold more than 13,000 units in EU countries in September alone.

This was a 272 percent increase year over year, a major piece of evidence that it has a lot of potential in foreign markets.

The drop in financial figures is likely a short-term issue for BYD, as it has already established itself as a formidable competitor to many companies in many markets. In Q1, it reported an increase in profit by 100 percent compared to the same time span the year prior.

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As it works to expand to even more markets in the world, it will continue to build upon its already-solid reputation.

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GM takes latest step to avoid disaster as EV efforts get derailed

There was an even larger step taken this morning, as the Detroit Free Press reported that GM was idling its Factory Zero plant in Michigan until late November, placing about 1,200 workers on indefinite layoff status.

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Credit: GM

General Motors has taken its latest step to avoid financial disaster as its electric vehicle efforts have been widely derailed.

GM’s electric vehicle manufacturing efforts started off hot, and CEO Mary Barra seemed to have a real hold on how the industry and consumers were starting to evolve toward sustainable powertrains. Even former President Joe Biden commended her as being a major force in the global transition to EVs.

However, the company’s plans have not gone as they’ve drawn them up. GM has reported some underwhelming delivery figures in recent quarters, and with the loss of the $7,500 tax credit, the company is planning for what is likely a substantial setback in its entire EV division.

Earlier this month, the company reported it would include a $1.6 billion charge in its quarterly earnings results from EV investments. It was the first true sign that things with GM’s EV projects were going to slow down.

There was an even larger step taken this morning, as the Detroit Free Press reported that GM was idling its Factory Zero plant in Michigan until late November, placing about 1,200 workers on indefinite layoff status.

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This is in addition to the 280 employees it has already laid off after production cuts that happened earlier this year at the Detroit-Hamtramck plant.

After November 24, GM will bring back 3,200 people to work until January 5 to operate both shifts. On January 5, GM is expected to keep 1,200 workers on indefinite layoff.

GM is not the only legacy automaker to make a move like this, as Ford has also started to make a move that reflects a cautious tone regarding how far and how committed it can be to its EV efforts.

After the tax credit was lost, it seemed to be a game of who would be able to float their efforts longest without the government’s help. Tesla CEO Elon Musk long said that the loss of these subsidies would help the company and hurt its competitors, and so far, that is what we are seeing.

Elon Musk was right all along about Tesla’s rivals and EV subsidies

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However, Tesla still has some things to figure out, including how its delivery numbers will be without the tax credit. Its best quarter came in Q3 as the credit was expiring, but Tesla did roll out some more affordable models after the turn of the quarter.

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Tesla expands Robotaxi geofence, but not the garage

This has broadened its geofence to nearly three times the size of Waymo’s current service area, which is great from a comparative standpoint. However, there seems to be something that also needs to be expanded as the geofence gets larger: the size of the Robotaxi fleet.

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Credit: Joe Tegtmeyer | X

Tesla has expanded its Robotaxi geofence four times, once as recently as this week.

However, the company has seemingly kept its fleet size relatively small compared to the size of the service area, making some people — even pro-Tesla influencers — ask for more transparency and an expansion of the number of vehicles it has operating.

Over the past four months, Tesla has done an excellent job of maintaining growth with its service area in Austin as it continues to roll out the early stages of what is the Robotaxi platform.

The most recent expansion brought its size from 170 square miles (440.298 sq. km) to 243 square miles (629.367 sq. km).

Tesla sends clear message to Waymo with latest Austin Robotaxi move

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This has broadened its geofence to nearly three times the size of Waymo’s current service area, which is great from a comparative standpoint. However, there seems to be something that also needs to be expanded as the geofence gets larger: the size of the Robotaxi fleet.

Tesla has never revealed exactly how many Model Y vehicles it is using in Austin for its partially driverless ride-hailing service (We say partial because the Safety Monitor moves to the driver’s seat for freeway routes).

When it first launched Robotaxi, Tesla said it would be a small fleet size, between 10 and 20 vehicles. In late August, after its second expansion of the service area, it then said it “also increased the number of cars available by 50 percent.”

Tesla reveals it has expanded its Robotaxi fleet in Austin

The problem is, nobody knows how many cars were in the fleet to begin with, so there’s no real concrete figure on how many Robotaxis were available.

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This has caused some frustration for users, who have talked about the inability to get rides smoothly. As the geofence has gotten larger, there has only been one mentioned increase in the fleet.

Tesla did not reveal any new figures or expansion plans in terms of fleet size in the recent Q3 Earnings Call, but there is still a true frustration among many because the company will not reveal an exact figure.

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