Porsche Moves to Liquidate Battery Subsidiary... "Plant Sale Underway"

German sports car manufacturer Porsche is set to effectively liquidate its electric vehicle battery subsidiary, Cellforce, as part of a restructuring plan.

Porsche factory. Photo by EPA Yonhap News

On August 20 (local time), German media outlets such as Spiegel reported that Porsche has decided to lay off about 200 of Cellforce's 286 employees, excluding research and development personnel, and has notified the labor office of its restructuring plans. The Cellforce plant in Kirchheim unter Teck, southwestern Germany, is currently up for sale, and according to Spiegel, BMW and defense companies specializing in drones have shown interest in acquiring the facility.

Porsche established Cellforce in 2021 as a joint venture with German battery manufacturer Customcells, aiming to produce its own electric vehicle batteries. In 2023, Porsche acquired full ownership of Cellforce and sought to expand battery production. However, despite investing billions of euros, the company failed to develop mass-producible batteries and ended up incurring only losses.

Local media have suggested that the federal government and the state government of Baden-W?rttemberg may seek to recover the 57 million euros (approximately 93 billion won) in subsidies that were provided when Cellforce was founded.

Porsche has already abandoned its goal of increasing the share of electric vehicles in its sales to 80% by 2030. In the first half of this year, pure electric vehicles accounted for only a quarter of total sales. In April, Porsche CEO Oliver Blume expressed a pessimistic outlook, stating, "I am not sure how much demand there will be for luxury electric vehicles in China, which is our most important market."

In fact, Porsche struggled last year, with its sales in China plummeting by 28% compared to the previous year. Although sales increased in markets outside China, this decline led to a 3% decrease in global sales.

Analysts attribute this situation to the rise of Chinese electric vehicles that emphasize cost-effectiveness. For example, Xiaomi's first electric vehicle, the SU7, launched last year, features an exterior similar to Porsche's first pure electric car, the Taycan, and offers comparable power and braking performance. However, it is reportedly sold in China at half the price of the Taycan, making it highly popular.

Meanwhile, other automakers are also revising their electric vehicle transition roadmaps as demand for electric vehicles falls short of expectations and competition with Chinese manufacturers intensifies. Audi has officially withdrawn its previous plan to stop launching new internal combustion engine models starting next year. The industry is also calling for a revision of the European Union (EU) regulation that would completely ban the sale of new internal combustion engine vehicles from 2035.