Porsche is powering into the electric car era with the Taycan, a sports car due to go into serial production next year. A hundred workers currently are building pre-production cars in the main factory outside Stuttgart.
The sleek Taycan, expected to ring up at about €100,000, will challenge Tesla’s premium models, even as the electric car pioneer moves downmarket with lower-priced models.
More than a thousand workers will join the crew when production begins in a factory built especially for the new cars. There will no longer be an assembly line. Rather, units will move on self-driving platforms from one work crew to the next. Taycan production should hit 20,000 units in the first full year and could scale up to 30,000 to meet demand.
Porsche has invested €700 million in the new plant, a fraction of the €6 billion it plans to invest in e-mobility in the coming years. After bidding diesel engines goodbye last month, the premium carmaker plans to market a mix of gas, electric and hybrid models.
By 2022, Porsche officials say, half of its vehicles will be either all-electric or hybrid. New electric models in planning could well include a compact SUV based on the combustion-engine Macan.
Porsche has powerful resources
Tesla has encountered problems in ramping up its serial production of its Model 3. The company's entry-level option still retails for more than $50,000 in the US.
Unlike Tesla, which burns through investor cash as it pioneers the way, Porsche has cash flow from its high-margin premium vehicles. It's playing catch-up with Tesla, but it has the resources to close the gap quickly. The sports carmaker plans to maintain its 15 percent operating profit margin on the new electric models, even taking into account the massive startup costs.
The e-mobility revolution is a pricey one. Porsche's CFO, Lutz Meschke, said Monday that if the carmaker decided to go public to unlock more funding, as Ferrari recently did with great success, it would have a €60 billion to €70 billion valuation. However, the company said in a statement that it was not pursuing an IPO.
Porsche has another big advantage as it moves into this new era: its high profile in China, which has become its biggest market. Chinese demand makes it possible for Porsche to maintain its fat 15 percent profit margin even as other automakers are seeing lower returns, said Arndt Ellinghorst, an auto analyst at Evercore ISI. And China is putting ever-greatest emphasis on e-mobility.
Batteries, for instance, will be tailor-made to provide sustained high performance. Porsche will buy the batteries built to its specifications from South Korea’s LG and then optimize them in its own factory in Germany.
And the next step after electric vehicles is self-driving vehicles. As carmakers move toward autonomous vehicles, a greater portion of the €2 billion to €3 billion budget will go toward IT and digital innovation, Mr. Meschke said.
Unlike parent Volkswagen, which is forecasting the loss of as many as 100,000 jobs, Porsche sees no significant reduction in the workforce. By the same token, however, it doesn’t expect huge gains in employment.
What's more, the new recruits for Taycan production may have a difficult time finding living quarters in the prosperous Stuttgart region. But Andreas Haffner, an executive board member in charge of staffing, says he already has pledges from local mayors to help. With its long history in the region, Porsche likely has the resources to solve this problem, too.
Stefan Menzel covers the automotive industry, with a focus on the Volkswagen Group. Darrell Delamaide adapted this story into English for Handelsblatt Global. To contact the author: [email protected].