Volkswagen Group, already grappling with significant issues, now faces further disruption as the Northvolt bankruptcy threatens delays for Porsche’s electric vehicle (EV) rollouts. They may need to postpone model launches due to the unavailability of critical battery cells from Northvolt.
For Porsche, this poses a unique challenge. The Taycan and Macan EVs use batteries from multiple suppliers. However, the upcoming 718 successor (Boxster and Cayman) was relying exclusively on Northvolt’s high-density cells.
The compact design of these two-seater sports cars leaves no room for larger battery packs, making the Northvolt partnership essential. Without a backup plan, Porsche must either secure a new supplier or hope Northvolt can meet its commitments.
Adding to Porsche’s woes, the automaker is struggling in its largest market—China. Once its biggest revenue source, Porsche’s sales in China have plummeted by 29% in the first nine months of 2024. The decline has forced Porsche to announce a significant restructuring, including the closure of nearly 30% of its 138 dealerships by 2026, focusing instead on profitable regions like Beijing and Shanghai.
The downturn highlights a broader shift in Chinese consumer preferences toward competitively priced domestic electric vehicles (EVs). Brands like BYD and NIO are gaining ground, offering advanced technology and affordability, which have outpaced European luxury automakers.
Global automakers, have been slow to adapt to these market shifts, falling behind domestic competitors. For instance, GM just took a $5 billion loss on its Chinese business, Nissan has all but abandoned the Chinese market, Jeep has lost its cachet, and even BMW and Mercedes are struggling to sell cars there.
For Porsche, the stakes are high. Its ability to navigate supply chain disruptions and reclaim market share in China will determine whether it can sustain its reputation for luxury and performance in a rapidly evolving automotive landscape.
Reference- Handelsblatt, Electrive, Autoblog, Northvolt website, Bloomberg