Porsche's Electric Sports Car Ambitions Stall as Budget Pressures Mount

FRANKFURT (Reuters) — Porsche AG is weighing a significant retreat from its electric vehicle plans, with internal discussions centering on the potential cancellation of its upcoming electric 718 sports car series, sources close to the matter told Reuters.

The envisioned all-electric versions of the iconic Boxster and Cayman models, key to Porsche's electrification strategy, face an uncertain future. Newly appointed Chief Executive Michael Leiters is reportedly evaluating whether to scrap the project altogether amid ballooning development costs and technical delays.

This deliberation marks a pivotal moment for the storied sports car maker. The gasoline-powered 718 models, discontinued last year, long served as an accessible entry point to the Porsche brand, with starting prices near €70,000. Their planned electric successors were seen as crucial for attracting a new generation of buyers.

However, Porsche's financial landscape has shifted dramatically. A sustained sales slump in the critical Chinese market and the immense cost of recalibrating its broader EV strategy have imposed severe budget constraints. Adding complexity, internal debates over whether to develop a plug-in hybrid variant of the new 718 have introduced further delays, risking the launch of outdated technology in a fiercely competitive segment.

While no final decision has been made, the mere consideration of canceling the electric 718 line underscores the pressure on Leiters. Since taking the helm on January 1, he has been tasked with balancing necessary spending cuts against the risk of underutilized factories, a consequence of softer-than-expected demand for the brand's existing electric models like the Taycan.

The 718 dilemma is symptomatic of broader challenges inherited from Porsche's aggressive, yet faltering, EV push. The company has already pivoted to emphasize combustion-engine and hybrid models after multiple profit warnings in 2025, a downturn that also affected parent company Volkswagen AG. Porsche has warned that correcting its EV course could slash up to €1.8 billion from operating profit next year.

Analysts suggest the potential move is a sobering acknowledgment of market realities. "This isn't just about one model line; it's a signal that the industry's breakneck transition to EVs is hitting serious speed bumps, even for premium players," said David Chen, an automotive analyst at Bergisch Consulting. "Porsche is prioritizing financial resilience over pure market-share dogma in the EV space."

The news elicited strong reactions from enthusiasts and observers. Sarah Miller, a long-time Porsche Club member, expressed disappointment: "The Boxster and Cayman were the heartbeats for many aspiring owners. To see their electric future jeopardized by spreadsheet calculations feels like a betrayal of the brand's spirit." In contrast, Marcus Thorne, a portfolio manager with holdings in Volkswagen, offered a pragmatic view: "This is responsible management. Throwing good money after bad into a delayed project with uncertain demand is what got them into this pinch. Leiters is making the tough calls needed to protect the brand's long-term value." A more critical take came from industry blogger Elena Rossi: "It's a stunning reversal. They touted an electric future, but at the first sign of headwinds, they retreat to the comfort of gas and hybrids. It raises serious questions about the depth of their commitment to electrification."

Porsche's shares showed muted reaction in Frankfurt trading. The company has pledged to restore its financial performance after its exit from Germany's blue-chip DAX index last year. The road back, as CFO Jochen Breckner indicated, may be long, with a return to double-digit profit margins not expected until after 2026.

A spokesperson for Porsche declined to comment on what it termed "speculation regarding future product planning."