The Fall of Porsche: Why Two Top Executives Had to Go

Welcome to Issue #54 of The German Autopreneur!

For years, Porsche seemed bulletproof. THE German car company that could do no wrong. The safe haven in our troubled industry.

Then came the 2024 numbers. Now two board members are out - the CFO and head of sales. They're calling it a "mutual agreement to part ways." But there's a bigger story here.

Let me show you what's really happening at Porsche. And yes, it involves China. Again.

Behind Porsche's Numbers

Two top executives are leaving Porsche: CFO Lutz Meschke and Sales Chief Detlev von Platen.

The numbers tell the story:

• Sales down 3% in 2024

• China market crashed 28%

• Revenue dropped 5%, profits fell over 25%

• Margins at 14-15% (target was 20%)

• Looking at 10-12% for 2025

• Stock down 30% since the 2022 IPO

But here's the real problem: Porsche can't crack the EV market. Electric cars make up just 12.6% of sales. Remember their big goal of 80% EVs by 2030? They've dropped it entirely.

The Lutz Meschke Story

There's more here than just bad numbers.

Here's the background: Oliver Blume has been running both VW and Porsche since 2022. A lot of people think that's one job too many.

That's when Meschke started positioning himself as the next Porsche CEO.

His big mistake? Last October, he spoke out against the EU's 2035 ban on gas engines. Nothing unusual about that view - except it went against everything Blume was saying. While Blume was pushing hard for electric cars, Meschke was pushing back.

Many think that clash got him fired.

The Detlev von Platen Story

The head of sales is out too. His problem? He didn't see China coming. Or better: He saw it too late.

What's happening in China shows Porsche's bigger problem:

They're stuck between two worlds. In the gas-engine world, Porsche is still king. The brand everyone wants. That market's still huge - but it's shrinking, especially in China.

Then there's the EV world. Different game, different rules. Porsche learned this the hard way in China: You can't just take a Porsche and make it electric. EV buyers want different things.

Plus, expensive EVs aren't selling in China anymore. The competition's too tough.

Think about what makes a Porsche special: The sound. The performance. The emotion. The way it drives. All of that comes from the gas engine.

Try bringing that magic to an electric car? That's the real challenge.

Because EVs are about different things: Software. AI. Entertainment features. It's a complete culture shock. And a massive dilemma.

Porsche's trying to play in both worlds:

• The luxury buyers who don't care about price? They're still buying gas engines. Even in China.

• But there's this whole new market emerging. With new competitors. Moving at tech company speed.

At some point, these two markets will merge. Might take a few years. But when it happens? You better be ready.

Here's a perfect example: Xiaomi launched their first car last year. The smartphone company made it look just like a Porsche Taycan. But here's the thing: It costs 75% less and comes packed with tech features and Xiaomi's digital ecosystem. The reviews? Surprisingly good. And Chinese buyers can't get enough.

Sure, typical Porsche buyers aren't rushing to buy a Xiaomi. Yet. But it shows something important: All that heritage Porsche built up over decades? Doesn't mean much in this new world.

What's Next?

Porsche's new plan? Build fewer cars. They want to drop from 310,000 to about 250,000 cars per year. The idea: Sell less, make more profit.

And they're already looking at replacements for both vacant board positions:

For CFO:

• Holger Peters from Skoda

• Jürgen Rittersberger from Audi

For Sales:

• Martin Sander from VW

• Alexander Pollich from Porsche

People are saying Blume might drop one of his jobs in 2025. Who could take over Porsche? Three names keep coming up:

• Klaus Zellmer (running Skoda now)

• Stefan Weckbach (VW's strategy chief)

• Peter Bosch (heading CARIAD)

Whoever takes over faces a huge task: Reinventing Porsche. The strategy for now? Rule the gas-engine market while they still can. They're putting €800 million into it this year - yes, even into new gas engines.

But at the same time, they need to build electric cars that are more than just "electrified Porsches". Walking that line? That's going to be the real challenge.

🔗 HB | CFO | RE | AP | EL | BL | AMW | WSJ | FAZ | AMW

That's all for today.

Feel free to reply to this email with your thoughts.

Until next week,
— Philipp

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