Porsche’s U-Turn in the Electric Vehicle Venture

Metaverse Planet October 26, 2025Last Updated: October 26, 2025

3 minutes read

In a strategic deviation, luxury car manufacturer Porsche has decided to reinvest in internal combustion engines and has entrusted the helm to Michael Leiters, the former McLaren CEO who is skeptical of electric vehicle technology.

At a time when the luxury automotive sector is rapidly moving toward an electric future, and just as Porsche was preparing to introduce the GTS brand to electric vehicles for the first time, the company is drawing attention with a strategic U-turn decision to once again put internal combustion engines at the center. The individual set to take the helm during this critical process is Michael Leiters, known for his distanced stance on electric vehicle technologies.

Leiters will start his role as Porsche CEO in January and will lead the company in its struggle with challenging market conditions and financial difficulties.

Before being appointed as Porsche CEO, Michael Leiters served as the CEO of the British supercar manufacturer McLaren and had openly expressed his skepticism about battery-powered engines in luxury vehicles. Leiters had stated that electric vehicles at the time “lacked emotional excitement” and that “the technology was not yet ready.”

However, Leiters is not actually a stranger to Porsche. In the early 2000s, he served as the personal assistant to one of Porsche’s top executives and was also the Chief Technology Officer at Ferrari. This background makes him one of the “rare individuals who meet all criteria,” possessing both an insider’s and an outsider’s perspective on luxury car brands. Analysts note that the Porsche family needs a leader who understands the German culture and the company’s operational environment but can also bring an outside perspective.

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Decline in Profitability and the Margin for Strategic Error

Porsche, which has long been one of the most reliable sources of profit within the Volkswagen Group, has recently been going through a financially challenging period. While the company’s car sales accounted for only an average of 3.6% of Volkswagen’s global deliveries, they provided almost 30% of the group’s operating profit. However, especially due to the decline in the Chinese market and high impairments, its shares have lost significant value since their May 2023 peak. In September, the forecast for the operating profit margin for 2025 was sharply lowered to a very low level of 0-2%.

Despite billions of dollars invested in electric models under former CEO Oliver Blume’s management, demand remained below expectations, and electric vehicles accounted for only 12.7% of the cars sold last year. This weak demand outlook forced Porsche into costly changes; a plan for a new electric SUV was suspended, and an impairment of 1.8 billion euros was recorded. During this process, the company is stepping back from its plan to halt the development of gasoline or hybrid successors for its best-selling models like the Macan and Cayman.

Analysts believe that Porsche was “overly optimistic” when it shifted towards electrification after the “Dieselgate” scandal. This strategic change also brings the risk of the company falling behind in the long-term all-electric vehicle competition.

Challenging Tasks Awaiting Leiters

One of the biggest challenges facing Porsche’s new CEO, Michael Leiters, will be preserving the brand’s premium status. It remains to be seen how the company will balance its goal of selling more cars with its high pricing policy. While rival Ferrari manages to maintain its prestige through the limited quantity of its cars, how Porsche will strike this balance is of critical importance.

Furthermore, software issues and ongoing electric vehicle product delays are among the urgent matters Leiters must address. In this field, where Chinese competitors are setting the standards, as stated by Sajjad Khan, Member of the Executive Board for IT and Software, Porsche must perfectly implement its plans to improve the quality of its products and technology in 2026 and 2027.