Porsche to Refocus Core Business by Closing Three Non-Core Subsidiaries

Porsche announced Friday it is closing three subsidiaries, including its battery unit Cellforce Group, as the German automaker seeks to refocus on its core business amid falling sales. The three subsidiaries being closed are Cellforce Group, Porsche eBike Performance and Cetitec. More than 500 people employed at the three subsidiaries will lose their jobs.

Cellforce Group is Porsche's battery subsidiary. It had already been through a realignment in August after Porsche dropped plans to make its own batteries. After the August realignment, Cellforce Group became a research and development arm.

Porsche eBike Performance made e-bike drive systems. Cetitec is a networking software subsidiary that served both Porsche and the wider Volkswagen Group. This is the indispensable foundation for a successful strategic realignment.

This forces us to make painful cuts — including our subsidiaries,” Porsche CEO and Executive Chair Michael Leiters said in a statement. Michael Leiters became CEO early this year. He first delivered a similar message in March when Porsche announced plans to realign its business.

“We will comprehensively reposition Porsche, make the company leaner, faster and the products even more desirable,” Michael Leiters said in March. In April, Porsche reached an agreement to sell its equity stakes in Bugatti Rimac and Rimac Group to a consortium led by New York-based investment firm HOF Capital. Porsche’s Taycan launched in 2019.

The Macan Electric was delayed by nearly two years due to software development issues within Volkswagen’s Cariad division. Porsche sales fell 11% in North America in the first quarter of this year. Porsche deliveries were off 21% in China in the first quarter of this year.

Porsche sales rose slightly in Germany in the first quarter of this year. Electric vehicles have claimed more than half the market in China.

Porsche has pointed to EV adoption for its challenges in some markets, though its continued poor performance in China suggests consumer acceptance of EVs may not be the sole root cause. The closure of Cellforce Group marks a reversal for Porsche’s electrification strategy.

“The battery cell is the combustion chamber of the future,” Oliver Blume said in 2022 when he chaired Porsche’s executive board.

After struggling to develop EVs in a timely manner, Porsche has shifted much of its new vehicle efforts to reviving some of its internal combustion platforms, which were originally intended to constitute a minority of sales by 2030. The company is still planning to rollout new EVs though, and will soon sunset the gas-powered version of the Porsche Macan.

Porsche is expected to bring an all-electric version of the Cayenne, and several variants, to market this year.

@techcrunch reported these developments as part of Porsche’s broader company overhaul.