Porsche shutters e-bike, battery, software subsidiaries as part of company overhaul

Porsche is set to close three of its subsidiaries as it grapples with declining sales and profits, a move announced by the German car manufacturer on Friday. Among the subsidiaries affected is Cellforce Group, its battery division, which has faced significant changes since Porsche decided against producing its own batteries. This decision transformed Cellforce into a research and development entity focused on battery technology. The automaker is now embracing a "technology-open powertrain strategy," suggesting a pivot towards collaborating with external firms for battery supply. Additionally, the company will shut down Porsche eBike Performance, which specialized in e-bike drive systems, and Cetitec, a software subsidiary that catered to both Porsche and the Volkswagen Group. This restructuring will impact over 500 employees across these divisions, who will be laid off as part of the company’s strategy to refocus on its primary automotive business. "We must refocus on our core business," stated Porsche CEO and Executive Chair Michael Leiters. He highlighted that these painful decisions are essential for a successful strategic realignment, which has been a part of the company’s vision since he took the helm earlier this year. Lieters previously announced intentions to reposition Porsche for greater efficiency and desirability in its product offerings. The brand has already taken steps to divest from several ventures, including selling its stakes in Bugatti Rimac and Rimac Group to a consortium led by HOF Capital earlier this year. Porsche's initial foray into electrification began positively with the launch of the Taycan in 2019. However, challenges soon arose in developing subsequent electric vehicles. The Macan Electric faced nearly a two-year delay due to software issues within Volkswagen’s Cariad division. The company has also reported a drop in sales across major markets, including an 11% decrease in North America and a 21% decline in China during the first quarter. While sales in Europe dipped by 18%, there was a slight uptick in Germany. Although Porsche has attributed its struggles partially to the adoption of electric vehicles, the ongoing challenges in China—where EVs dominate the market—indicate that the reasons for poor performance may be more complex. The closure of Cellforce underscores the shifting landscape of Porsche’s electric vehicle ambitions, which initially aimed to set the company apart with unique battery technology. Former executive chairman Oliver Blume noted in 2022 that "the battery cell is the combustion chamber of the future.” As Porsche recalibrates its focus, it is not abandoning its electric vehicle plans entirely. The company is poised to release new electric models while phasing out the gasoline version of the Macan, with an all-electric version of the Cayenne expected to debut soon, alongside several variants.