Porsche lowers its 2025 forecast due to expected increase in battery costs, supply chain costs and impact of tariffs in April and May
- Porsche lowered its revenue guidance for 2025 to a range of €37 and €38 billion (prior guidance: €39 to €40 billion), lower than analysts estimate of €38.8 billion.
- It also lowered its operating return on sales guidance to a range of 6.5% and 8.5% (prior guidance: 10% to 12%) and automotive net cash flow margin to a range of 4% and 6% (previous guidance: 7% to 9%), lower than analysts estimate of 10.3%.
- The adjusted forecast takes into account impact of trade tariffs in the month of April and May, expected increase in battery costs by €0.5 billion and increase in supply costs, especially in the Chinese market due to geopolitical tensions.
- Porsche shares lost 2.8% while Volkswagen Group shares were little changed.
Assessment
It’s not surprising that Porsche had to lower its 2025 revenue guidance. Given its challenges in China and the weak demand for EVs, I had projected its 2025 revenue at €36.2 billion. However, it is the operating return on sales guidance that has fallen significantly below my expectation of 11%. Considering that I expect the U.S. tariff to create a headwind of up to €1.9 billion for Porsche, today’s adjustment is unlikely to be the last.