22/09/26
By AfterPost
Porsche, for 15 years the most profitable car company in the world per car sold, has officially gone from hero to zero inside the Volkswagen Group.
Europe's biggest automaker Volkswagen shocked investors on Friday with its second profit warning in a year. The group slashed its 2026 operating margin forecast to *no more than 1%*, down from 4% to 5.5% previously. The reason? A triple blow of €10 billion in one-off costs, with the largest chunk — *€6 billion — tied directly to a writedown of its 75.4% stake in Porsche AG.*
This is the second Porsche writedown in a year, after a €2.7 billion impairment in 2023. VW's goodwill on Porsche has now collapsed from €18.8 billion at the 2022 IPO to just around €10 billion. In plain English: VW is admitting Porsche is worth almost half what it thought.
VW shares crashed 7.5% — its biggest drop in a year — dragging BMW, Stellantis and the entire European auto sector down with it. Porsche AG shares fell 4.9% on the news.
Why Porsche Is Imploding: 3 Fatal Hits
1. China Disaster: Sales More Than Halved
China was Porsche's cash machine. Not anymore. Porsche deliveries in China have *more than halved in the past 4 years*, from over 95,000 in 2021 to under 45,000 expected in 2026. Chinese millionaires no longer want a gasoline Cayenne — they want a BYD Yangwang or Li Auto with better software, faster charging, and at half the price. Porsche's brand cachet is collapsing among young Chinese luxury buyers.
VW CFO Arno Antlitz admitted: "China market has contracted 20% this year, no stabilization in sight." VW's Chinese JV profits are down 80% in a decade.
2. EV Strategy U-Turn — The Most Expensive Mistake
Porsche bet big on electric, pushing the Taycan and planning to make the Macan and 718 Boxster EV-only. Demand flopped. Taycan sales fell 50% in 2024-25, Macan EV orders are weak, and Porsche had to keep combustion models longer, burning billions in double development. Battery costs killed its legendary margins.
Porsche's operating margin fell to just *1.1% last year* — below even VW's mass-market brand. When listed in 2022, Porsche promised 17-19% margins. Now CEO Michael Leiters is still promising 10-15% medium term, but investors don't believe it.
3. US Tariffs and "Endless Clean-up Surprises"
On top of China, new US tariffs under President Trump hit Porsche's US-imported lineup hard, as it has no US factory. Analysts at Jefferies called the writedown "endless clean-up surprises" and lack of oversight.
The Final Insult: Skoda is the New Porsche
Auto industry veteran Ferdinand Dudenhöffer put it brutally this week: _"The days of Porsche being a profit driver are over. Porsche is getting smaller and smaller."_
He noted that Porsche's margins have now *fallen below the wider VW group average and have even been overtaken by Skoda* — the Czech budget brand once mocked as cheap. Skoda now delivers higher margins per car than Porsche inside VW. Analysts are openly calling Skoda "the new Porsche" of the Volkswagen empire — a badge of shame for Stuttgart.
What This Means for VW's 100,000 Job Cuts
The Porsche crisis deepens VW's existential crisis. VW is in the middle of its "Future Plan 2030" — the biggest restructuring in its 89-year history. The supervisory board just approved up to *100,000 job cuts globally*, 35,000+ in Germany, factory closures, and a desperate pivot to affordable EVs.
Porsche itself is planning another 4,100 layoffs on top of 9,000 already agreed, to find €700 million in savings, according to Handelsblatt documents.
As IG Metall union called 280 protests across Germany on Monday, its leader said: "We won't stand by while a key industry is hollowed out."
The crown jewel is now the anchor. And without Porsche's profits to fund VW's EV future, the whole group is staring at a 1% margin future.