(Bloomberg) — Supply Lines is a daily newsletter that tracks global trade. Sign up here.
Most Read from Bloomberg
Porsche AG expects its profit margin to slip into single digits this year, with the luxury-car maker warning about US tariffs and higher costs from weak electric-vehicle adoption.
The German manufacturer now projects return on sales to fall to as low as 6.5%, down from previous guidance of at least 10%. Porsche is one of the carmakers most exposed to President Donald Trump’s trade moves because it lacks a factory in the US.
The Volkswagen AG-controlled brand is grappling with waning demand for EVs, slumping sales in China and now additional costs from Trump’s auto tariffs. The US recently surpassed China as Porsche’s top market thanks to robust demand for its Macan and Cayenne sport utility vehicles, but it imports all its cars from Europe.
Porsche shares fell as much as 7.6% in Frankfurt early Tuesday, and have lost half their value in the past year.
Porsche invested large sums in EVs and batteries, but the drop in demand has forced a rethink. The carmaker will no longer independently expand production of high-performance batteries with its subsidiary Cellforce, it said Monday, increasing one-off costs for this year to €1.3 billion ($1.5 billion).
“We have to face the reality that we see from the markets, namely a complete slowdown when it comes to electric mobility,” Chief Financial Officer Jochen Breckner said on a call with reporters.
US tariffs hit sales in April and will also affect performance in May, Porsche said, but the company was unable to estimate any effects beyond those months. Assuming no price rises, the annual cost of tariffs could hit €2 billion, according to calculations by Citi analyst Harald Hendrikse.
The company has no plans to start making cars in the US because that would be more expensive than shouldering the costs of the current tariffs, Breckner said. Porsche could raise prices depending on the final tariffs, he added.
Automakers across Europe are trying to navigate the rising trade tensions. Ferrari NV is raising prices for some of its models in the US by as much as 10%, while Mercedes-Benz Group AG is considering withdrawing sales of its entry-level vehicles from the market. Renault SA said last week it will likely delay the US introduction of its Alpine sports-car brand.
