Porsche AG is shutting down three subsidiaries and cutting more than 500 jobs as the German automaker restructures its operations amid declining sales, falling profits, and mounting pressure on its electric vehicle strategy.
The company announced Friday that it will close its battery subsidiary Cellforce Group, e-bike systems division Porsche eBike Performance, and software networking company Cetitec.
The closures are part of a broader restructuring effort led by Michael Leiters, who took over as chief executive earlier this year.
“We must refocus on our core business,” Leiters said in a statement.
“This is the indispensable foundation for a successful strategic realignment. This forces us to make painful cuts — including our subsidiaries,” he added.
Battery Division Faces End After Strategy Shift
Cellforce Group had once represented a major part of Porsche’s electric vehicle ambitions.
The subsidiary was originally created to develop and manufacture battery technology intended to differentiate Porsche’s electric vehicles from competitors.
However, Porsche already reduced Cellforce’s role last August after abandoning plans to manufacture its own batteries at scale.
The company shifted Cellforce into a research and development-focused operation before now deciding to close the business entirely.
Porsche said it is now pursuing a “technology-open powertrain strategy,” indicating increased reliance on external battery suppliers rather than internal production.
In 2022, former Porsche executive board chair Oliver Blume described battery cells as “the combustion chamber of the future.”
The closure marks a major reversal from those earlier electrification ambitions.
Software And E-Bike Units Also Closing
Porsche eBike Performance, which developed electric bicycle drive systems, will also shut down.
Cetitec, a software and networking subsidiary serving Porsche and the broader Volkswagen Group, is also being closed.
More than 500 employees across the three subsidiaries will lose their jobs.
The restructuring follows earlier efforts by Porsche to reduce investments outside its main automotive operations.
In April, the company agreed to sell its ownership stakes in Bugatti Rimac and Rimac Group to a consortium led by New York-based investment firm HOF Capital.
Electric Vehicle Expansion Slowed By Delays And Weak Sales
Porsche’s electric vehicle strategy initially gained momentum after the launch of the Porsche Taycan in 2019.
However, the company later faced delays developing additional electric models.
The electric version of the Porsche Macan was delayed nearly two years because of software problems tied to Volkswagen’s Cariad division.
The automaker has also struggled in several major markets this year.
First-quarter sales in North America declined 11%, while deliveries in China fell 21%.
European sales dropped 18%, though sales in Germany recorded slight growth.
Porsche has partly blamed slower-than-expected electric vehicle adoption for its financial pressures.
However, the company’s weak performance in China — where electric vehicles account for more than half of the market — has raised additional questions about broader competitiveness and consumer demand.
The company has recently increased focus on updating and extending internal combustion vehicle programs that were previously expected to represent a shrinking portion of sales by 2030.
Even so, Porsche continues developing new electric vehicles.
The company plans to discontinue the gasoline-powered Macan and launch several all-electric versions of the Porsche Cayenne later this year.
Featured image credits: Wikimedia Commons
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