STUTTGART, Germany – Porsche, the luxury sports car and SUV maker owned by Volkswagen, has a problem. How do you take a brand which owes its success to the excitement and raucous noise generated by the internal combustion engine, and sell silent electric cars with the same name?
The answer would seem to be that for the time being at least, gasoline powered cars will still be an important part of the Porsche line-up, but meanwhile the first electric cars will at least look as exciting as their conventional counterparts, and provide traditional head-turning performance which you won’t be able to hear, but will see, albeit briefly as they disappear over the horizon.
At the annual press conference here Friday, Porsche spelled out this approach.
“For the next ten years, Porsche intends to continue with a three-pronged approach, incorporating optimized combustion engines, plug-in hybrid models and purely electric sports cars – all in typical Porsche style of course. The regions of the world are developing at different rates. We are therefore gearing ourselves up as flexibly as possible for the transitional period,” said Oliver Blume, Porsche Ag chairman.
Last month, Porsche said it is doubling investment in electromobility to more than 6 billion euros ($7.5 billion) by 2022, focusing on both plug-in hybrids and purely electric vehicles.
About 500 million euros ($622 million) of the increased spending was earmarked for the development of variants and derivatives of the all-electric Mission E sedan, and around 1 billion euros for electrification and hybridization of the existing product range, which includes the big Cayenne SUV, and the Panamera limousine.
The purely electric Mission E 600 hp sports car will accelerate to 60 mph from a standstill in less than 3.5 seconds and offer a claimed range of over 300 miles. The 800 volt system will take 15 minutes to add 250 miles of range. Porsche is expected to launch the Mission E next year. At the Geneva Car Show last week, Porsche unveiled a possible SUV variant, the E Cross Turismo concept, based on a similar powertrain.
At the meeting Friday, Porsche said full electric and plug-in hybrids will account for about 25% of sales by 2025. That’s a lot of quiet vehicles.
Felipe Munoz, global automotive analyst at JATO Dynamics, said that is a dilemma for a company like Porsche.
“Porsche is all about the senses – the feel of the forces when cornering fast, hearing the sound of a boxer, etc, and none of that has any place in EVs. Therefore the brand faces the big dilemma of building sport cars that lack a sporty soul, and this takes it to a possible shift of its customer group. Nevertheless, the future bans on ICE (internal combustion engines) is forcing Porsche to boost its electrification. The Mission E is described as a “life insurance policy” among Porsche executives,” Munoz said.
“The brand’s plans seem to be a bit closer to reality than other brands which are still delaying the launch of their EVs. As they are pure electric cars, I think Porsche is first launching the sedan and SUV, so it doesn’t hurt the sensibility of the most purist consumers, who still see Porsche as a pure sport cars brand. By beginning its electrification plan with a sedan and SUV, its powerful ICE sport cars and drivers won’t suffer, at least at the beginning,” he said.
Porsche sales rose 4% to 246,375 sports cars and SUVs in 2017, boosted by the big selling compact SUV, the Macan. Porsche has warned growth might slow this year as it aims to safeguard its exclusivity.
“Our aim for 2018 is to stabilise revenue and deliveries at this high level,” said Lutz Meschke, Porsche Deputy Chairman.
Last year the profit margin rose to 17.6% from 17.4%.
According to IHS Markit, Mission E sedan sales will open with 6,500 globally next year, jump to 21,500 in 2020 and peak at 27,150 in 2021.
IHS Markit analyst Tim Urquhart said Porsche appears well positioned in this emerging sector of the market and able to charge high prices, probably more than the current leader, the Tesla Model S.
“The Porsche brand heritage cache will allow it to charge more, probably quite a lot more and it will be better built than the Tesla. Things are going to get difficult now for Tesla with new competition emerging. There are going to be new bread and butter electric vehicles too like the VW ID, while Tesla is struggling to make the Model 3 in sufficient numbers and of high enough quality. It was a terrific achievement for Tesla to come up with these cars, but now they have to do the stuff that traditional manufacturers have done for years, make enough cars in sufficient numbers of high quality to meet demand, and that’s not easy,” Urquhart said.
— With assistance by Neil Winton