Porsche Abandons Battery Production Amid Weak EV Demand in China

Porsche AG has officially abandoned its plans to scale up battery production at its Cellforce subsidiary, marking a significant shift in its electric vehicle (EV) strategy. The German automaker cited weak demand for its EVs, particularly in China, as the key reason for the decision. In a statement, Porsche CEO Oliver Blume confirmed the company would stop pursuing mass production of its own battery cells due to insufficient volume and lack of scale. Instead, Cellforce will pivot toward research and development, with some employees being offered positions at PowerCo, a battery startup under the Volkswagen Group [1].

The move comes as part of a broader industry-wide struggle to compete with Chinese battery giants such as CATL. European manufacturers have found it increasingly difficult to establish a foothold in the global battery supply chain. This challenge has been compounded by the recent bankruptcy filing of Northvolt, Europe’s most prominent battery producer, which is now being acquired by the U.S. firm Lyten [3].

Porsche’s decision was first hinted at in April, when it announced it would not proceed with its plan to ramp up battery production at Cellforce due to “patchy demand” for its electric vehicles. The latest confirmation has led to the layoff of approximately 200 workers at Cellforce, with 286 previously employed. While no exact figures were provided, the company stated the remaining workforce would remain focused on research and innovation [2].

The shift underscores the broader uncertainties facing the EV sector, particularly in terms of market adoption. Porsche, known for its high-performance sports cars, has long emphasized that electromobility will remain a key propulsion method in the future. However, the decision to halt its own battery production indicates a strategic recalibration, potentially favoring reliance on existing supply chains and partners rather than in-house development [4].

The change has also drawn attention to the economic and industrial implications for Europe. With Porsche joining a list of companies reassessing their EV strategies, concerns are growing over the continent’s ability to maintain a competitive position in the global automotive transition. The move has been described as a “blow to industry” by some reports, emphasizing the challenges faced by European automakers in scaling battery production at a cost-effective level [5].

Porsche’s announcement signals a more pragmatic approach to EV production, aligning with the current market dynamics. While the company remains committed to electrification, it appears willing to adapt its strategies in response to demand fluctuations and competitive pressures. The decision to abandon battery manufacturing reflects a broader trend of automotive companies rethinking their supply chains and production models in the evolving EV landscape [6].

Source:

[1] Porsche shelves plans to produce own batteries as EV ... (https://www.ft.com/content/a88d666c-361b-4ef7-ab26-cc070b5040cc)

[2] Porsche packs in battery production in blow to industry (https://bilyonaryo.com/2025/08/25/porsche-packs-in-battery-production-in-blow-to-industry/power/)

[4] Porsche discontinues battery production - BGNES (https://www.bgnes.com/economy/porsche-discontinues-battery-production)

[6] Porsche Pulls Plug on Battery Manufacturing Dreams with ... (https://www.ctol.digital/news/porsche-cellforce-battery-manufacturing-shutdown-200-jobs/)