Porsche AG

[weijian]

Just short of 3 years ago, investors were cheering as parent Voltswagen sold a 12.5% stake during the IPO. The future of mobility is currently forecasted to be vastly different from what we are now, the type of difference between horse carriages and Ford's Model 3. Therefore, Mr Market is reflecting it as such.

Porsche CEO seeks fresh cost cuts, warning business model ‘no longer works’ in post-Trump, new China world

“Our business model that sustained us over many decades no longer is functioning today in its current form. Business conditions have deteriorated massively within a short period of time,”

He cited a pair of related contributing factors, starting with China, where first-half vehicle sales plunged 28% to their lowest level in eleven years amid a brutal price war, particularly for EVs. The brand had once sold 95,700 cars there in 2021, an all-time record—at its current pace, it would be lucky to get half that result this year.

This bled into another issue: a slowdown in the adoption rate of its EVs. Now it no longer expects an 80% share of its volumes to come from fully-electric cars by 2030 as realistic, preferring not to give a forecast any longer.

This bled into another issue: a slowdown in the adoption rate of its EVs. Now it no longer expects an 80% share of its volumes to come from fully-electric cars by 2030 as realistic, preferring not to give a forecast any longer.

Once the world’s third most valuable carmaker after Tesla and Toyota, Porsche shares lost 29% so far this year. Anyone who poured money into Porsche’s September 2022 public offering of stock—Europe’s largest in over a decade—is currently sitting on losses short of 50%.

https://finance.yahoo.com/news/porsche-c...59392.html

Porsche enters a new era with successful IPO (Sept2022)
https://newsroom.porsche.com/en/2022/com...29830.html

[specuvestor]

Porsche has been positioned as a practical on the road sports car, unlike say Ferrari which is flashy and atas

Problem is the key selling point of 0-100km/h within 5-6 seconds is already achievable by EV. EV cannot reach the atas status of Ferraris yet but Porsche is stuck between a rock and a hard place.

Nonetheless there will still be those that buy BMW and Porsche vs say YU7 for the status symbol but this will become smaller market overall- and that's the challenge facing the traditional ICE manufacturers

[weijian]

Porsche's expanded product range reminds of Louis Vuitton, who sells accessories (wallets, purses, belts and passport covers) as complimentary to their main product line leather bags. While Ferrari is akin to Hermes who mainly sells leather bags (if we exclude their scarfs). I would think both strategies work - not all times but at most times. Unfortunately, things work until they don't.

Just like TheHourGlass acquiring Watches of Switzerland as part of their "customer development" strategy by establishing a relationship before the customer has the means to fulfill their timeless wrist aspirations, it does make sense for Porsche to sell cheaper Macans/Caymans before some of them inevitably upgrade to the 911. But yeah, on an annual basis, Porsche sells 10-15x more cars than Ferrari and therefore, there will be plenty of pain to come in this market transition.

While EVs can easily attain the acceleration levels, I think it is quite impossible for EVs to have the same level of noise as Ferrari/Porsche 911s. Essentially, there may be still plenty of small men who want big revving cars.