Porsche AG’s new chief executive, Dr. Michael Leiters, is steering the German sports-car maker back toward gasoline-powered models after a bruising fiscal year in which roughly 3.9 billion euros in extraordinary expenses crushed profitability. The strategic reversal, which includes extending the life of existing combustion engines and delaying electric-vehicle platform work into the 2030s, comes with a human cost: the company is preparing additional job cuts as it tries to rebuild margins that fell to just 1.1% in fiscal 2025. For a brand synonymous with the flat-six roar of the 911, the pivot is both a financial correction and a cultural reset.
A New CEO With a Combustion Pedigree
Leiters, who previously held senior engineering roles at Ferrari and other performance marques, assumed the top job on January 1, 2026, after Oliver Blume stepped aside to concentrate on running the broader Volkswagen Group. The Supervisory Board highlighted his track record in high-performance engineering and complex product portfolios, signaling that Porsche’s immediate priority is operational discipline rather than headline-grabbing technology bets.
Public records on Leiters’ career show a progression through engineering and product roles that blends technical fluency with commercial responsibility. That mix matters now because Porsche’s challenge is not whether it can build fast electric cars, but whether it can fund that future without sacrificing the profitability that underpins its brand value.
His early public signals have been direct. At a media day for the Auto Shanghai show in Shanghai, China, Porsche displayed a new 911 Spirit 70 convertible, a petrol-only model that the company is counting on to lift margins after what Reuters described as a rough 2025. The choice of a heritage-themed 911 variant as a showpiece, rather than an electric Taycan successor, tells the market exactly where Leiters sees near-term value and where he believes Porsche’s core strengths still lie.
The Financial Damage That Forced the Shift
Porsche’s annual report for fiscal 2025 laid bare the toll of its aggressive EV push. Sales revenue reached 36.27 billion euros, but operating profit collapsed to just 413 million euros, producing an operating margin of 1.1%. The primary culprit was approximately 3.9 billion euros in extraordinary expenses, which included write-downs and restructuring items linked to the electric-vehicle strategy. CFO Jochen Breckner underscored during the company’s annual press conference that these charges, rather than underlying demand, were the main reason for the margin collapse.
To put that margin in context, Porsche historically targeted double-digit operating returns, a hallmark of its position as a premium manufacturer. A 1.1% margin is territory more commonly associated with mass-market automakers running on thin volumes and heavy discounting. Yet Porsche still delivered 279,449 vehicles during the year, of which battery-electric vehicles accounted for 22.2%. That BEV share, while meaningful, was not large enough to justify the scale of spending that went into developing electric platforms and software architectures, particularly when demand softened faster than internal forecasts anticipated and competition intensified.
The gap between ambition and results explains why the board moved to install a leader whose instincts lean toward profitable combustion engineering rather than an accelerated electrification timeline. For investors who had grown accustomed to Porsche as a cash machine within the Volkswagen Group, the 2025 figures were a warning that the EV transition, if mis-timed, can erode even the strongest balance sheets.
Combustion Models Get a Longer Runway
Under its realigned product strategy, Porsche plans to supplement its lineup with what it calls “brand-defining” combustion models. Existing internal combustion engine vehicles will stay in production longer than originally planned, and the company has shifted its next-generation EV platform work into the 2030s rather than the late 2020s. In practice, that means more time and investment for upgraded engines, transmissions, and hybrid systems that can be sold at healthy margins.
One of the most concrete moves is a new SUV line positioned above the Cayenne that will launch initially with combustion and plug-in hybrid powertrains, not as a pure electric offering. This decision reflects a calculation that wealthy buyers in key markets, especially the United States and China, still prioritize range, refueling convenience, and towing capability over the environmental credentials of a full battery-electric vehicle when spending six figures on a car.
The 911 itself sits at the center of the margin recovery plan. Petrol variants of the iconic sports car carry some of the highest profit margins in the industry because their development costs are largely amortized and their buyer base is loyal and relatively price-insensitive. Leaning into that strength, rather than diverting capital toward an all-electric 911 that purists have resisted, is the clearest example of Leiters choosing near-term cash flow over long-dated electrification targets. Special editions like the Spirit 70 allow Porsche to command higher prices with limited incremental engineering cost, directly supporting the push back toward double-digit margins.
At the same time, Porsche is not abandoning electrification entirely. Existing electric models such as the Taycan are expected to remain in the portfolio, and plug-in hybrids will bridge the gap between combustion and full EVs. But the sequencing has changed: instead of racing to convert the entire lineup, Porsche is spacing out its EV investments to match actual demand and regulatory milestones, rather than optimistic projections made at the height of the EV hype cycle.
Job Cuts Follow the Strategy Reversal
Financial pivots of this scale rarely happen without workforce consequences. Porsche is preparing further layoffs tied directly to the costly reversal of its electric car strategy. While the company has not publicly disclosed exact figures or a detailed timeline, reporting indicates that the restructuring will affect roles linked to EV development and related support functions, as management seeks to align staffing with the slower roll-out of new electric platforms.
This creates a difficult narrative for the company. Porsche hired aggressively during the EV ramp-up, bringing in software engineers, battery specialists, and electric drivetrain experts to compete with both traditional rivals and new entrants. Many of those roles are now redundant or less central to a product roadmap that gives priority to combustion and hybrid vehicles. Employees who joined to build an electric future may find themselves casualties of a return to the company’s gasoline past, raising questions about how Porsche will attract top engineering talent for its next wave of innovation.
The broader Volkswagen Group, where Blume now focuses his attention, faces similar pressures. VW has been negotiating plant closures and layoffs across its European operations as it grapples with overcapacity, slower-than-expected EV uptake, and intense price competition. Porsche’s retrenchment thus fits a pattern across German automakers that committed heavily to electrification before consumer demand and charging infrastructure fully matured, and are now recalibrating to protect profitability.
Balancing Brand Heritage and Regulatory Pressure
The strategic reset leaves Porsche walking a tightrope between regulatory realities and brand heritage. On one side, tightening emissions rules in Europe, China, and parts of North America will continue to push manufacturers toward lower fleet CO₂ output. On the other, Porsche’s most profitable products remain high-performance combustion cars that appeal precisely because they do not drive or sound like mainstream electric vehicles.
Leiters’ approach appears to be to buy time. By leaning on efficient combustion engines, plug-in hybrids, and incremental improvements, Porsche aims to stay on the right side of regulations while preserving the character of its core models for as long as possible. The delayed EV platform work into the next decade suggests that the company expects battery technology, charging infrastructure, and customer expectations to evolve significantly before it commits to a fully electric reinterpretation of its flagship cars.
Communication will be crucial in maintaining customer trust during this period. Porsche has been using its own media channels to emphasize continuity in design and driving dynamics, even as it acknowledges the need for lower emissions and more efficient drivetrains. For enthusiasts, the message is that the 911 and its siblings will remain recognizably Porsche for years to come. For regulators and investors, the message is that the company is not abandoning electrification, but pacing it in a way that preserves financial resilience.
Ultimately, the success of Leiters’ strategy will be judged on whether Porsche can restore margins without losing momentum in the technological arms race reshaping the auto industry. If the extended life of combustion models and carefully targeted hybrids deliver the cash to fund a more measured EV transition, the current pain (job cuts, write-downs, and a bruised reputation for foresight) may be remembered as a necessary correction. If not, Porsche risks being seen as a company that flinched at the hardest part of the transition just as the rest of the market accelerated into it.
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*This article was researched with the help of AI, with human editors creating the final content.
