In a major setback for Europe’s push to cut reliance on Chinese battery suppliers, Swedish battery maker Northvolt filed for Chapter 11 bankruptcy protection in the US last month. The move is aimed at restructuring its debt and securing new funding. While the process is expected to be completed by early next year, the company has said it will be business as usual for the time being.

Behind the scenes, however, Handelsblatt is reporting that several automakers may have to delay future models due to problems at Northvolt. The upcoming all-electric Porsche 718 replacement is rumored to be one of the victims and it might miss its intended launch of late next year.

More: Porsche 718 Boxster EV Shows More Details As It Nears Production

When reached for comment, a spokesperson declined to confirm or deny the rumor. Instead, they told the publication they can’t comment on supplier issues.

While Porsche is staying tight-lipped, it appears the company is heavily dependent on Northvolt batteries and their high energy density. This is important for sports cars as they’ll enable weight savings through the use of smaller battery packs.

Interestingly, it appears the electric 718 is also facing other issues. In particular, an unknown “component in the drivetrain” is said to be causing problems and this, alone, could also result in a delay.

Porsche isn’t the only one that could be impacted as Audi also has a deal with Northvolt. Their batteries will be used to power models based on the PPE platform including the A6 e-tron.

However, Audi is also sourcing batteries from CATL and LG. This means the situation isn’t critical and the A6 e-tron wasn’t even slated to use Northvolt batteries until later. That’s fortunate as it means the company might be able to secure a new contract with another supplier, if needed.

A lot of the blame is being placed on Northvolt founder Peter Carlsson, who ‘stepped aside’ as CEO following the bankruptcy. Rumors suggest he brought the “worst parts of Tesla’s corporate culture” to his new job and this resulted in “unrealistic schedules” as well as “overambitious goals.” That led to problems and BMW pulling out of a multi-billion dollar contract.

It remains to be seen how everything will shake out, but European automakers are understandably nervous.

Porsche is making some radical changes to its electrification strategy in response to slumping Taycan sales and a stubborn loyalty among customers to good old combustion-powered machines. For a brand that up until now seemed all-in on electric, the pivot speaks volumes about Porsche’s read on its buyers’ preferences—and their reluctance to abandon traditional powertrains.

The automaker, which has publicly come out against Europe’s proposed 2035 ban on combustion engines, is now investigating how it might re-engineer future cars that were designed as EVs to accept hybrid powerplants. But that’s going to take a herculean effort and ton of cash if it’s even possible.

More: Porsche Confirms New 911 Turbo Hybrid Coming Next Year

The next-generation 718 Boxster and Cayman sports cars are fully electric, fully signed off and will be launched in the coming months. It’s possible Porsche could reverse-engineer them to accept combustion engines, as Fiat has been forced to do with the 500e. However, even if they greenlighted the idea, it would be years before a retrofitted model hit the road, assuming it’s financially worthwhile at all.

Another vehicle that Porsche conceived as an EV, but which must be under consideration for a combustion rethink is the flagship K1 SUV due in 2028. The timeframe and likely dimensions of the three-row K1 suggest it has a better chance of being adapted to hybrid power.

Customer Demand Drives Strategy Shift

“A lot of customers in the premium and luxury segment are looking in the direction of combustion-engined cars, there’s a clear trend,” Porsche CFO Lutz Meschke said in a conference call before going on to explain how the brand is reacting to that news.

“We will refresh our combustion engine cars, including the Panamera and the Cayenne, and of course, we will continue to rely on plug-in hybrids” Meschke added.

Flexible Production for a Mixed Lineup

“As for our electrified lineup, we are very flexible when it comes to our production footprint. We can produce combustion engine, plug-in hybrids and electrified cars in one production line in Leipzig,” Meschke continued. “When it comes to research and development, you’ll see more flexibility in the upcoming years. We will develop new combustion-engined derivatives [of our EVs] in order to give the right answer to customer demand.”

Related: Porsche Taycan Sales Are A Disaster, But Cayenne Saves The Day

Porsche had at one time planned for 80 percent of its lineup to be EVs by the end of the decade. The remaining 20 percent would be accounted for by the 911, which has gained its first hybrid model, but was always going to stay away from fully-electric power until well into the 2030s. Porsche enjoyed early success with the Taycan and engineered an electric Macan and the upcoming 718 EVs, with visions of those models taking over from the older ICE equivalent after being offered in tandem during a handover period.

Sales Drop Challenges Porsche’s EV Push

But Taycan sales have tanked this year despite the introduction of a facelifted model, particularly in the once-lucrative Chinese market, while combustion 718 sales have rallied as buyers get them while they can. Porsche’s operating profit dropped 26.7 percent to €5.5 billion ($5.95 bn) in the first three quarters of 2024 versus Jan-Sep 2023.